Sensient Technologies Corporation Reports Results for the Quarter Ended September 30, 2022 – Business Wire
Sensient Reaffirms its 2022 Guidance
MILWAUKEE–(BUSINESS WIRE)–Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $361.1 million in this year’s third quarter compared to $344.3 million in last year’s third quarter. Reported operating income in the third quarter of 2022 was $47.5 million compared to $47.0 million in the third quarter of 2021. Reported diluted earnings per share was 85 cents in the third quarter of 2022 compared to 80 cents in the third quarter of 2021. Foreign currency translation decreased revenue by approximately 4% and earnings per share by approximately 6% in the present quarter.
The 2021 third quarter reported results included divestiture & other related costs and operational improvement plan costs, which in total decreased 2021 third quarter diluted earnings per share by $0.04. The 2021 third quarter reported results also included the operations of the divested product lines, which were not material to diluted earnings per share in the third quarter of 2021. We did not make any adjustments to our 2022 third quarter reported results for divestiture & other related costs, operational improvement plan costs, or results of the divested product lines. The adjustments to our reported results are described in more detail under “Reconciliation of Non-GAAP Amounts” at the end of this release.
BUSINESS REVIEW
Reported
Quarter
Year-to-Date
3.0%
-0.5%
8.8%
11.8%
5.3%
9.5%
4.9%
4.7%
Adjusted
Local Currency(1)
Quarter
Year-to-Date
6.7%
6.9%
14.6%
16.0%
14.5%
17.2%
9.9%
11.0%
The Flavors & Extracts Group reported third quarter revenue of $187.0 million compared to $181.7 million in last year’s third quarter, an increase of 3.0%. Adjusted local currency revenue increased 6.7% in the quarter. The Group benefited from pricing across all of its product lines. Segment operating income was $26.3 million in the current quarter compared to $25.2 million reported in the comparable period last year, an increase of 4.7%. Adjusted local currency operating income increased 5.6% in the quarter. The higher operating income was primarily due to the favorable pricing, partially offset by higher input costs. Foreign currency translation decreased segment revenue by approximately 3% and segment operating income by approximately 1% in the quarter. Segment operating income as a percent of revenue in the third quarter of 2022 was 14.1%.
The Color Group reported revenue of $151.5 million in the quarter compared to $139.2 million in last year’s third quarter, an increase of 8.8%. Adjusted local currency revenue increased 14.6% in the quarter. The Group had strong volume growth and higher pricing in both Food & Pharmaceutical Colors and Personal Care. Segment operating income was $28.2 million in the quarter compared to $27.3 million in last year’s comparable period, an increase of 3.5%. Adjusted local currency operating income increased 10.9% compared to the prior year’s third quarter. The higher operating income is primarily a result of the higher volumes and favorable pricing, partially offset by higher input costs. Foreign currency translation decreased segment revenue by approximately 6% and segment operating income by approximately 7% in the quarter. Segment operating income as a percent of revenue in the third quarter of 2022 was 18.6%.
The Asia Pacific Group reported revenue of $35.2 million in the quarter compared to $33.4 million in last year’s third quarter, an increase of 5.3%. Adjusted local currency revenue increased 14.5% in the quarter. The higher revenue was a result of strong volume growth and higher pricing. Segment operating income was $7.0 million in the quarter compared to $6.6 million in last year’s third quarter, an increase of 5.3%. Adjusted local currency operating income increased 16.3% in the quarter. The higher operating income was primarily a result of the favorable volume growth and higher pricing. Foreign currency translation decreased segment revenue and operating income by approximately 9% and 11%, respectively, in the quarter. Segment operating income as a percent of revenue in the third quarter of 2022 was 19.7%.
Corporate & Other reported operating costs of $14.0 million in the current quarter compared to $12.1 million in last year’s third quarter, an increase of 16.0%. Adjusted local currency operating expenses for Corporate & Other increased 23.5% in the quarter primarily due to higher performance-based compensation.
2022 OUTLOOK
Sensient is reconfirming its expectation for 2022 full year GAAP diluted earnings per share to grow at a high-teen growth rate compared to the Company’s 2021 reported GAAP diluted earnings per share of $2.81. Our full year 2022 guidance does not include any material divestiture & other related costs, operational improvement plan costs, or results of divested businesses.
The Company continues to expect 2022 revenue to grow at a high single-digit rate in local currency compared to the Company’s 2021 adjusted revenue(2). The Company continues to expect its 2022 adjusted EBITDA(2) and diluted earnings per share to grow at a high single- to double-digit rate in local currency compared to the Company’s 2021 adjusted EBITDA(2) and the Company’s 2021 adjusted diluted earnings per share(2) of $3.13.
The Company expects full year 2022 earnings per share reported on a U.S. dollar basis to be impacted by foreign currency headwinds of approximately twenty cents based on current exchange rates.
The Company’s guidance is based on current conditions and trends in the economy and the markets in which the Company operates and is subject to various risks and uncertainties as described below. The Company will continue to monitor the impacts of the COVID-19 pandemic and the conflict between Russia and Ukraine on our business.
(2) See “Reconciliation of Non-GAAP Amounts” at the end of this release for more information.
USE OF NON-GAAP FINANCIAL MEASURES
The Company’s non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include: currency movements, depreciation and amortization, non-cash share-based compensation, divestiture & other related costs, operational improvement plan costs and income, and the results of the divested operations. These measures are provided to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release.
CONFERENCE CALL
The Company will host a conference call to discuss its 2022 third quarter financial results at 8:30 a.m. CDT on Friday, October 21, 2022. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company’s web site at www.sensient.com.
A replay of the call will be available one hour after the end of the conference call through October 28, 2022, by calling (877) 344-7529 and referring to conference identification number 2992460. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company’s web site at www.sensient.com on or after October 25, 2022.
This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2022 Outlook” above. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the impact and uncertainty created by the COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers, and suppliers, the availability and cost of raw materials, energy, and other supplies, the availability and cost of labor, logistics, and transportation, governmental regulations and restrictions, and general economic conditions, including inflation; 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; changes in costs of raw materials, including energy; 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 other factors included in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated and supplemented by the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and in other documents that the Company files with the SEC. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations. This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Except to the extent required by applicable laws, the Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, cosmetic, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient.com
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
% Change
2022
2021
% Change
$
361,076
$
344,287
4.9
%
$
1,088,303
$
1,039,816
4.7
%
239,318
229,216
4.4
%
710,696
697,538
1.9
%
74,265
68,113
9.0
%
222,081
212,670
4.4
%
47,493
46,958
1.1
%
155,526
129,608
20.0
%
3,672
3,037
9,748
9,792
43,821
43,921
145,778
119,816
7,773
10,009
34,012
28,300
$
36,048
$
33,912
6.3
%
$
111,766
$
91,516
22.1
%
$
0.86
$
0.81
$
2.67
$
2.17
$
0.85
$
0.80
$
2.65
$
2.16
41,896
42,024
41,885
42,140
42,242
42,206
42,199
42,287
Three Months Ended September 30,
Nine Months Ended September 30,
Revenue
2022
2021
% Change
2022
2021
% Change
$
187,046
$
181,667
3.0
%
$
559,110
$
561,979
(0.5
%)
151,469
139,239
8.8
%
456,175
408,166
11.8
%
35,221
33,442
5.3
%
109,014
99,599
9.5
%
(12,660
)
(10,061
)
(35,996
)
(29,928
)
$
361,076
$
344,287
4.9
%
$
1,088,303
$
1,039,816
4.7
%
$
26,337
$
25,164
4.7
%
$
83,929
$
76,718
9.4
%
28,200
27,253
3.5
%
90,035
79,462
13.3
%
6,952
6,601
5.3
%
22,877
19,146
19.5
%
(13,996
)
(12,060
)
(41,315
)
(45,718
)
$
47,493
$
46,958
1.1
%
$
155,526
$
129,608
20.0
%
September 30,
December 31,
2022
2021
$
46,579
$
25,740
287,197
261,121
501,382
411,635
45,582
42,657
880,740
741,153
404,840
435,009
440,439
446,478
113,189
122,853
$
1,839,208
$
1,745,493
$
132,904
$
125,519
21,947
8,539
100,574
98,247
255,425
232,305
547,190
503,006
27,854
28,579
54,225
43,178
954,514
938,425
$
1,839,208
$
1,745,493
2022
2021
$
111,766
$
91,516
39,262
38,828
12,476
6,431
283
203
–
13,774
20,465
3,793
(39,520
)
(35,290
)
(112,021
)
(15,898
)
(39,598
)
(15,016
)
24,110
24,007
1,819
1,763
(4,342
)
(1,155
)
198
3,192
14,898
116,148
(51,703
)
(37,608
)
94
201
–
36,790
(1,048
)
(13,875
)
947
1,348
(51,710
)
(13,144
)
187,715
55,589
(87,657
)
(67,534
)
–
(31,467
)
(51,681
)
(49,468
)
(2,056
)
(582
)
46,321
(93,462
)
11,330
(1,373
)
20,839
8,169
25,740
24,770
$
46,579
$
32,939
2022
2021
$
1.23
$
1.17
Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)
Reconciliation of Non-GAAP Amounts
The Company’s results for the three and nine months ended September 30, 2022 and 2021 include adjusted revenue, adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which exclude divestiture & other related costs, operational improvement plan costs and income, and the results of the divested operations.
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
% Change
2022
2021
% Change
$
361,076
$
344,287
4.9
%
$
1,088,303
$
1,039,816
4.7
%
–
(1,622
)
–
(29,399
)
$
361,076
$
342,665
5.4
%
$
1,088,303
$
1,010,417
7.7
%
$
47,493
$
46,958
1.1
%
$
155,526
$
129,608
20.0
%
–
–
–
28
–
241
–
13,473
–
70
–
(2,398
)
–
483
–
(2,010
)
$
47,493
$
47,752
(0.5
%)
$
155,526
$
138,701
12.1
%
$
36,048
$
33,912
6.3
%
$
111,766
$
91,516
22.1
%
–
241
–
13,501
–
1,179
–
283
–
70
–
(2,398
)
–
(18
)
–
590
–
483
–
(2,010
)
–
(115
)
–
44
$
36,048
$
35,752
0.8
%
$
111,766
$
101,526
10.1
%
$
0.85
$
0.80
6.3
%
$
2.65
$
2.16
22.7
%
–
0.03
–
0.33
–
–
–
(0.04
)
–
0.01
–
(0.05
)
$
0.85
$
0.85
0.0
%
$
2.65
$
2.40
10.4
%
Note: Earnings per share calculations may not foot due to rounding differences.
(1) Tax impact adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.
Three Months Ended September 30,
Adjusted
Adjusted
Revenue
2022
Adjustments(2)
2022
2021
Adjustments(2)
2021
$
187,046
$
–
$
187,046
$
181,667
$
(1,312
)
$
180,355
151,469
–
151,469
139,239
(310
)
138,929
35,221
–
35,221
33,442
–
33,442
(12,660
)
–
(12,660
)
(10,061
)
–
(10,061
)
$
361,076
$
–
$
361,076
$
344,287
$
(1,622
)
$
342,665
$
26,337
$
–
$
26,337
$
25,164
$
66
$
25,230
28,200
–
28,200
27,253
4
27,257
6,952
–
6,952
6,601
–
6,601
(13,996
)
–
(13,996
)
(12,060
)
724
(11,336
)
$
47,493
$
–
$
47,493
$
46,958
$
794
$
47,752
Nine Months Ended September 30,
Adjusted
Adjusted
Revenue
2022
Adjustments(2)
2022
2021
Adjustments(2)
2021
$
559,110
$
–
$
559,110
$
561,979
$
(27,616
)
$
534,363
456,175
–
456,175
408,166
(1,638
)
406,528
109,014
–
109,014
99,599
(295
)
99,304
(35,996
)
–
(35,996
)
(29,928
)
150
(29,778
)
$
1,088,303
$
–
$
1,088,303
$
1,039,816
$
(29,399
)
$
1,010,417
$
83,929
$
–
$
83,929
$
76,718
$
(2,859
)
$
73,859
90,035
–
90,035
79,462
548
80,010
22,877
–
22,877
19,146
(87
)
19,059
(41,315
)
–
(41,315
)
(45,718
)
11,491
(34,227
)
$
155,526
$
–
$
155,526
$
129,608
$
9,093
$
138,701
(Unaudited)
Reconciliation of Non-GAAP Amounts – Continued
3.0
%
(2.9
%)
(0.8
%)
6.7
%
8.8
%
(5.5
%)
(0.3
%)
14.6
%
5.3
%
(9.2
%)
0.0
%
14.5
%
4.9
%
(4.4
%)
(0.6
%)
9.9
%
4.7
%
(1.1
%)
0.2
%
5.6
%
3.5
%
(7.4
%)
0.0
%
10.9
%
5.3
%
(11.0
%)
0.0
%
16.3
%
16.0
%
(0.1
%)
(7.4
%)
23.5
%
1.1
%
(6.5
%)
1.8
%
5.8
%
6.3
%
(6.3
%)
5.5
%
7.1
%
2.2
%
(5.6
%)
N/A
7.8
%
(0.5
%)
(2.4
%)
(5.0
%)
6.9
%
11.8
%
(3.8
%)
(0.4
%)
16.0
%
9.5
%
(7.4
%)
(0.3
%)
17.2
%
4.7
%
(3.3
%)
(3.0
%)
11.0
%
9.4
%
(1.2
%)
(4.0
%)
14.6
%
13.3
%
(4.9
%)
0.9
%
17.3
%
19.5
%
(9.6
%)
(0.5
%)
29.6
%
(9.6
%)
0.0
%
(30.4
%)
20.8
%
20.0
%
(5.1
%)
8.4
%
16.7
%
22.7
%
(5.1
%)
12.8
%
15.0
%
12.8
%
(4.0
%)
N/A
16.8
%
(3) For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, Diluted Earnings per Share, and Adjusted EBITDA, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income.
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
% Change
2022
2021
% Change
$
47,493
$
46,958
1.1
%
$
155,526
$
129,608
20.0
%
13,082
13,011
39,262
38,828
–
(49
)
–
(146
)
3,785
2,243
12,476
6,431
–
241
–
13,501
–
70
–
(2,398
)
–
483
–
(2,010
)
$
64,360
$
62,957
2.2
%
$
207,264
$
183,814
12.8
%
We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.
Category: Earnings
Amy Agallar
(414) 347-3706
Amy Agallar
(414) 347-3706