Sensient Technologies Corporation Reports Results for the Quarter Ended December 31, 2023
- None.
- Reported operating income declined 80.4% to $8.1 million compared to $41.2 million recorded in the fourth quarter of 2022.
- Reported earnings per share was a loss of 14 cents in the fourth quarter of 2023 compared to income of 69 cents in the fourth quarter of 2022.
Insights
The reported financial results of Sensient Technologies Corporation indicate a marginal increase in revenue, which on the surface may seem positive. However, the decrease in operating income by 80.4% is a significant red flag for stakeholders. The sharp decline is largely attributed to costs associated with the Portfolio Optimization Plan, which are primarily non-cash. It's essential to scrutinize these costs to understand their nature and future implications.
Moreover, the decrease in local currency adjusted operating income and EBITDA suggests that the company is facing operational challenges beyond currency fluctuations. The reported loss per share further underscores the financial strain on the company. Investors should be aware that such a decline in profitability could affect the company's ability to invest in growth opportunities or return value to shareholders through dividends or share buybacks in the short term.
From a market perspective, the decline in sales volumes for Sensient Technologies points to potential issues with demand for their products in the food, pharmaceutical and personal care markets. The environment described by the company as 'transitional' with 'inflation and destocking' indicates broader market challenges that could affect other players in the industry as well.
However, the company's Portfolio Optimization Plan is a strategic move that could lead to improved efficiency and cost savings. If executed effectively, this could position Sensient better against competitors and improve its market share. It's also important to monitor the 'strong sales win rate' as it could be indicative of the company's potential to rebound and capitalize on future market growth.
The mention of inflation by Sensient Technologies as a significant headwind is reflective of the current macroeconomic climate. Inflation can erode consumer purchasing power, which in turn can affect Sensient's sales volumes. The company's anticipation of a better environment in 2024 suggests a forecast of easing inflationary pressures or improved strategies to cope with such challenges.
Cost reduction strategies, like the Portfolio Optimization Plan, are often employed to mitigate the impact of inflation. However, the effectiveness of these strategies in offsetting inflationary pressures will be critical to the company's financial health. Long-term, if the company can manage these costs and inflation stabilizes, there could be a favorable impact on profitability and stock performance.
Fourth Quarter Consolidated Results
-
Reported revenue increased
0.2% to$349.3 million $348.7 million 1.8% . -
Reported operating income declined
80.4% to$8.1 million $41.2 million $27.8 million 9.6% and8.5% , respectively, in the fourth quarter, with each decreasing as a result of lower sales volumes. -
Reported earnings per share was a loss of
14 cents in the fourth quarter of 2023 compared to income of69 cents in the fourth quarter of 2022. Adjusted local currency EPS(1) decreased23.4% in the fourth quarter as a result of lower sales volumes and higher interest expense.
“As expected, 2023 was a transitional year for the market and Sensient as inflation and destocking provided significant headwinds. I expect a better environment in 2024 with a return to volume growth and continuation of our strong sales win rate. Concurrently, we are proactively reducing costs through a Portfolio Optimization Plan that we expect to provide significant cost savings. Overall, I am optimistic about 2024,” said Paul Manning, Sensient’s Chairman, President, and Chief Executive Officer.
Fourth Quarter Group Results |
||||||||||||
| Reported | Local Currency(1) | |||||||||||
| Revenue | Quarter | Year-to-Date | Quarter | Year-to-Date | ||||||||
| Flavors & Extracts | 2.3 |
% |
|
0.4 |
% |
|
0.4 |
% |
|
-0.8 |
% |
|
| Color | -4.4 |
% |
|
0.7 |
% |
|
-7.0 |
% |
|
-0.9 |
% |
|
-3.9 |
% |
|
1.7 |
% |
|
-4.6 |
% |
|
3.5 |
% |
||
| Total Revenue | 0.2 |
% |
|
1.4 |
% |
|
-1.8 |
% |
|
0.3 |
% |
|
| Reported | Adjusted Local Currency(1) | |||||||||||
| Operating Profit | Quarter | Year-to-Date | Quarter | Year-to-Date | ||||||||
| Flavors & Extracts | -16.0 |
% |
|
-16.7 |
% |
|
-16.6 |
% |
|
-17.3 |
% |
|
| Color | -13.2 |
% |
|
-8.1 |
% |
|
-16.2 |
% |
|
-9.6 |
% |
|
-11.0 |
% |
|
4.4 |
% |
|
-11.9 |
% |
|
6.3 |
% |
||
| Total Operating Profit | -80.4 |
% |
|
-21.2 |
% |
|
-9.6 |
% |
|
-6.8 |
% |
|
The Flavors & Extracts Group reported fourth quarter 2023 revenue of
The Color Group reported revenue of
The Asia Pacific Group reported revenue of
Corporate & Other reported operating expenses of
During the fourth quarter of 2023, the Company initiated a Portfolio Optimization Plan to undertake an effort to optimize its organizational structure with a focus on driving improved productivity and delivering cost improvement. The Company currently estimates that the Portfolio Optimization Plan will deliver annual cost savings of approximately
In addition, the Company will be increasing its Board of Directors from nine to ten directors and nominating Brett Bruggeman for election to the Board of Directors at its 2024 annual meeting of shareholders. Mr. Bruggeman is the Chief Operating Officer of Land O’Lakes, Inc., a Fortune 250 food company and one of the world’s premier agribusiness companies. “We are delighted to nominate Brett to the Board. He brings over 30 years of food industry experience, including 16 years at Land O’Lakes. His insights into agribusiness will be invaluable as the Company continues our expansion in natural colors and flavors across all of its business units,” said Paul Manning, Sensient’s Chairman, President, and Chief Executive Officer.
Sensient also announced today that Stephen Rolfs, Senior Vice President and Chief Financial Officer, has informed the Company that he intends to retire effective June 30, 2024. Mr. Rolfs has served as Chief Financial Officer since February of 2015. Tobin Tornehl will be named Chief Financial Officer upon Mr. Rolfs’ retirement. Mr. Tornehl joined Sensient in 2008 and has served as Vice President, Controller, and Chief Accounting Officer, since 2018. Prior to joining Sensient, Mr. Tornehl worked in a variety of financial leadership roles at Jefferson Wells and Ernst & Young. Mr. Tornehl is a Certified Public Accountant and holds a Bachelor of Business Administration from
2024 OUTLOOK
Sensient expects 2024 diluted earnings per share to be between
The Company expects 2024 revenue, 2024 adjusted EBITDA(1), and 2024 adjusted diluted earnings per share(1) to grow at a low-to-mid single-digit rate on a local currency basis compared to the Company’s 2023 revenue, the Company’s 2023 adjusted EBITDA(1), and the Company’s 2023 adjusted diluted earnings per share(1) of
The Company expects its 2024 diluted earnings per share to be impacted by higher interest expense. The Company currently expects interest expense to increase by approximately
The Company’s guidance is based on current conditions and economic and market trends in the markets in which the Company operates and is subject to various risks and uncertainties as described below.
(1) |
Please refer to “Reconciliation of Non-GAAP Amounts” at the end of this release for more information regarding our non-GAAP financial measures. |
USE OF NON-GAAP FINANCIAL MEASURES
The Company’s non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include: currency movements, depreciation and amortization, Portfolio Optimization Plan costs, divestiture and other related income, and non-cash share-based compensation. These measures are provided to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release.
CONFERENCE CALL
The Company will host a conference call to discuss its 2023 fourth quarter financial results at 8:30 a.m. CST on Friday, February 9, 2024. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company’s web site at www.sensient.com.
A replay of the call will be available one hour after the end of the conference call through February 16, 2024, by calling (877) 344-7529 and using access code 4647643. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company’s web site at www.sensient.com on or after February 13, 2024.
This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2024 Outlook” above. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the Company’s ability to manage general business, economic, and capital market conditions, including actions taken by customers in response to such market conditions, and the impact of recessions and economic downturns; the impact of macroeconomic and geopolitical volatility, including inflation and shortages impacting the availability and cost of raw materials, energy, and other supplies, disruptions and delays in the Company’s supply chain, and the conflicts between
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in
| Sensient Technologies Corporation | ||||||||||||||||||||||
| (In thousands, except percentages and per share amounts) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Consolidated Statements of Earnings | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||||||||
| Revenue | $ |
349,302 |
|
$ |
348,736 |
|
0.2 |
% |
$ |
1,456,450 |
|
$ |
1,437,039 |
|
1.4 |
% |
||||||
| Cost of products sold |
|
249,472 |
|
|
237,232 |
|
5.2 |
% |
|
996,153 |
|
|
947,928 |
|
5.1 |
% |
||||||
| Selling and administrative expenses |
|
91,767 |
|
|
70,279 |
|
30.6 |
% |
|
305,274 |
|
|
292,360 |
|
4.4 |
% |
||||||
| Operating income |
|
8,063 |
|
|
41,225 |
|
(80.4 |
%) |
|
155,023 |
|
|
196,751 |
|
(21.2 |
%) |
||||||
| Interest expense |
|
6,524 |
|
|
4,799 |
|
|
25,172 |
|
|
14,547 |
|
||||||||||
| Earnings before income taxes |
|
1,539 |
|
|
36,426 |
|
|
129,851 |
|
|
182,204 |
|
||||||||||
| Income taxes |
|
7,372 |
|
|
7,305 |
|
|
36,457 |
|
|
41,317 |
|
||||||||||
| Net earnings | $ |
(5,833 |
) |
$ |
29,121 |
|
(120.0 |
%) |
$ |
93,394 |
|
$ |
140,887 |
|
(33.7 |
%) |
||||||
| Earnings per share of common stock: | ||||||||||||||||||||||
| Basic | $ |
(0.14 |
) |
$ |
0.70 |
|
$ |
2.22 |
|
$ |
3.36 |
|
||||||||||
| Diluted | $ |
(0.14 |
) |
$ |
0.69 |
|
$ |
2.21 |
|
$ |
3.34 |
|
||||||||||
| Average common shares outstanding: | ||||||||||||||||||||||
| Basic |
|
42,051 |
|
|
41,896 |
|
|
42,027 |
|
|
41,888 |
|
||||||||||
| Diluted |
|
42,051 |
|
|
42,255 |
|
|
42,242 |
|
|
42,213 |
|
||||||||||
| Results by Segment | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
Revenue |
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
|||||||||||
| Flavors & Extracts | $ |
182,939 |
|
$ |
178,893 |
|
2.3 |
% |
$ |
741,072 |
|
$ |
738,003 |
|
0.4 |
% |
||||||
| Color |
|
141,396 |
|
|
147,842 |
|
(4.4 |
%) |
|
607,959 |
|
|
604,017 |
|
0.7 |
% |
||||||
|
33,202 |
|
|
34,567 |
|
(3.9 |
%) |
|
146,090 |
|
|
143,581 |
|
1.7 |
% |
|||||||
| Intersegment elimination |
|
(8,235 |
) |
|
(12,566 |
) |
|
(38,671 |
) |
|
(48,562 |
) |
||||||||||
| Consolidated | $ |
349,302 |
|
$ |
348,736 |
|
0.2 |
% |
$ |
1,456,450 |
|
$ |
1,437,039 |
|
1.4 |
% |
||||||
| Operating Income | ||||||||||||||||||||||
| Flavors & Extracts | $ |
18,059 |
|
$ |
21,495 |
|
(16.0 |
%) |
$ |
87,773 |
|
$ |
105,424 |
|
(16.7 |
%) |
||||||
| Color |
|
21,343 |
|
|
24,584 |
|
(13.2 |
%) |
|
105,370 |
|
|
114,619 |
|
(8.1 |
%) |
||||||
|
5,889 |
|
|
6,615 |
|
(11.0 |
%) |
|
30,800 |
|
|
29,492 |
|
4.4 |
% |
|||||||
| Corporate & Other |
|
(37,228 |
) |
|
(11,469 |
) |
|
(68,920 |
) |
|
(52,784 |
) |
||||||||||
| Consolidated | $ |
8,063 |
|
$ |
41,225 |
|
(80.4 |
%) |
$ |
155,023 |
|
$ |
196,751 |
|
(21.2 |
%) |
||||||
| Sensient Technologies Corporation | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| Consolidated Condensed Balance Sheets | December 31, | December 31, | ||||
2023 |
2022 |
|||||
| Cash and cash equivalents | $ |
28,934 |
$ |
20,921 |
||
| Trade accounts receivable |
|
272,164 |
|
302,109 |
||
| Inventories |
|
598,399 |
|
564,110 |
||
| Prepaid expenses and other current assets |
|
37,119 |
|
47,640 |
||
| Total Current Assets |
|
936,616 |
|
934,780 |
||
| Goodwill & intangible assets (net) |
|
436,177 |
|
434,315 |
||
| Property, plant, and equipment (net) |
|
505,277 |
|
483,193 |
||
| Other assets |
|
136,437 |
|
129,326 |
||
| Total Assets | $ |
2,014,507 |
$ |
1,981,614 |
||
| Trade accounts payable | $ |
131,114 |
$ |
142,365 |
||
| Short-term borrowings |
|
13,460 |
|
20,373 |
||
| Other current liabilities |
|
91,732 |
|
109,415 |
||
| Total Current Liabilities |
|
236,306 |
|
272,153 |
||
| Long-term debt |
|
645,085 |
|
630,331 |
||
| Accrued employee and retiree benefits |
|
27,715 |
|
26,364 |
||
| Other liabilities |
|
52,077 |
|
53,168 |
||
| Shareholders' Equity |
|
1,053,324 |
|
999,598 |
||
| Total Liabilities and Shareholders' Equity | $ |
2,014,507 |
$ |
1,981,614 |
||
| Sensient Technologies Corporation | |||||||
| (In thousands, except per share amounts) | |||||||
| (Unaudited) | |||||||
| Consolidated Statements of Cash Flows | |||||||
| Year Ended December 31, | |||||||
2023 |
2022 |
||||||
| Cash flows from operating activities: | |||||||
| Net earnings | $ |
93,394 |
|
$ |
140,887 |
|
|
| Adjustments to arrive at net cash provided by operating activities: | |||||||
| Depreciation and amortization |
|
57,820 |
|
|
52,467 |
|
|
| Share-based compensation expense |
|
8,933 |
|
|
16,138 |
|
|
| Net loss on assets |
|
541 |
|
|
276 |
|
|
| Net gain on divestiture of business |
|
- |
|
|
(2,532 |
) |
|
| Portfolio optimization plan costs |
|
24,089 |
|
|
- |
|
|
| Deferred income taxes |
|
(5,100 |
) |
|
(11,010 |
) |
|
| Changes in operating assets and liabilities: | |||||||
| Trade accounts receivable |
|
35,801 |
|
|
(46,086 |
) |
|
| Inventories |
|
(28,193 |
) |
|
(159,014 |
) |
|
| Prepaid expenses and other assets |
|
5,767 |
|
|
(5,055 |
) |
|
| Trade accounts payable and other accrued expenses |
|
(5,978 |
) |
|
17,489 |
|
|
| Accrued salaries, wages, and withholdings |
|
(17,830 |
) |
|
3,486 |
|
|
| Income taxes |
|
(1,175 |
) |
|
4,422 |
|
|
| Other liabilities |
|
1,628 |
|
|
602 |
|
|
| Net cash provided by operating activities |
|
169,697 |
|
|
12,070 |
|
|
| Cash flows from investing activities: | |||||||
| Acquisition of property, plant, and equipment |
|
(87,868 |
) |
|
(79,322 |
) |
|
| Proceeds from sale of assets |
|
156 |
|
|
264 |
|
|
| Proceeds from divestiture of business |
|
- |
|
|
2,532 |
|
|
| Acquisiton of new businesses |
|
(1,650 |
) |
|
(22,714 |
) |
|
| Other investing activities |
|
1,741 |
|
|
792 |
|
|
| Net cash used in investing activities |
|
(87,621 |
) |
|
(98,448 |
) |
|
| Cash flows from financing activities: | |||||||
| Proceeds from additional borrowings |
|
351,662 |
|
|
328,597 |
|
|
| Debt payments |
|
(355,161 |
) |
|
(171,447 |
) |
|
| Dividends paid |
|
(69,222 |
) |
|
(68,915 |
) |
|
| Other financing activities |
|
(9,278 |
) |
|
(2,056 |
) |
|
| Net cash (used in) provided by financing activities |
|
(81,999 |
) |
|
86,179 |
|
|
| Effect of exchange rate changes on cash and cash equivalents |
|
7,936 |
|
|
(4,620 |
) |
|
| Net increase (decrease) in cash and cash equivalents |
|
8,013 |
|
|
(4,819 |
) |
|
| Cash and cash equivalents at beginning of period |
|
20,921 |
|
|
25,740 |
|
|
| Cash and cash equivalents at end of period | $ |
28,934 |
|
$ |
20,921 |
|
|
| Supplemental Information | |||||||
| Year Ended December 31, | 2023 |
2022 |
|||||
| Dividends paid per share | $ |
1.64 |
|
$ |
1.64 |
|
|
| Sensient Technologies Corporation | ||||||||||||||||||||||||
| (In thousands, except percentages and per share amounts) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Reconciliation of Non-GAAP Amounts | ||||||||||||||||||||||||
| The Company's results for the three and twelve months ended December 31, 2023 and 2022 include adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which exclude divestiture & other related income and portfolio optimization plan costs. | ||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||||||||||
| Operating income (GAAP) | $ |
8,063 |
|
$ |
41,225 |
|
|
(80.4 |
%) |
$ |
155,023 |
|
$ |
196,751 |
|
|
(21.2 |
%) |
||||||
| Divestiture & other related income – Selling and |
|
|
|
|
|
|
|
|
||||||||||||||||
| administrative expenses | - |
(2,532 |
) | - |
(2,532 |
) | ||||||||||||||||||
| Portfolio optimization plan costs – Cost of products sold |
|
3,135 |
|
|
- |
|
|
3,135 |
|
|
- |
|
||||||||||||
| Portfolio optimization plan costs – Selling and administrative |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| expenses | 24,706 |
- |
24,706 |
- |
||||||||||||||||||||
| Adjusted operating income | $ |
35,904 |
|
$ |
38,693 |
|
|
(7.2 |
%) |
$ |
182,864 |
|
$ |
194,219 |
|
|
(5.8 |
%) |
||||||
| Net earnings (GAAP) | $ |
(5,833 |
) |
$ |
29,121 |
|
|
(120.0 |
%) |
$ |
93,394 |
|
$ |
140,887 |
|
|
(33.7 |
%) |
||||||
| Divestiture & other related income, before tax |
|
- |
|
|
(2,532 |
) |
|
- |
|
|
(2,532 |
) |
||||||||||||
| Tax impact of divestiture & other related income(1) |
|
- |
|
|
636 |
|
|
- |
|
|
636 |
|
||||||||||||
| Portfolio optimization plan costs, before tax |
|
27,841 |
|
|
- |
|
|
27,841 |
|
|
- |
|
||||||||||||
| Tax impact of portfolio optimization plan costs(1) |
|
(415 |
) |
|
- |
|
|
(415 |
) |
|
- |
|
||||||||||||
| Adjusted net earnings | $ |
21,593 |
|
$ |
27,225 |
|
|
(20.7 |
%) |
$ |
120,820 |
|
$ |
138,991 |
|
|
(13.1 |
%) |
||||||
| Diluted earnings per share (GAAP) | $ |
(0.14 |
) |
$ |
0.69 |
|
|
(120.3 |
%) |
$ |
2.21 |
|
$ |
3.34 |
|
|
(33.8 |
%) |
||||||
| Divestiture & other related income, net of tax |
|
- |
|
|
(0.04 |
) |
|
- |
|
|
(0.04 |
) |
||||||||||||
| Portfolio optimization plan costs, net of tax |
|
0.65 |
|
|
- |
|
|
0.65 |
|
|
- |
|
||||||||||||
| Adjusted diluted earnings per share | $ |
0.51 |
|
$ |
0.64 |
|
|
(20.3 |
%) |
$ |
2.86 |
|
$ |
3.29 |
|
|
(13.1 |
%) |
||||||
| Note: Earnings per share calculations may not foot due to rounding differences. | ||||||||||||||||||||||||
| (1) Tax impact adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. | ||||||||||||||||||||||||
| Results by Segment | Three Months Ended December 31, | |||||||||||||||||||||||
| Adjusted | Adjusted | |||||||||||||||||||||||
| Operating Income | 2023 |
|
Adjustments(2) |
|
2023 |
|
2022 |
|
Adjustments(2) |
|
2022 |
|||||||||||||
| Flavors & Extracts | $ |
18,059 |
|
$ |
- |
|
$ |
18,059 |
|
$ |
21,495 |
|
$ |
- |
|
$ |
21,495 |
|
||||||
| Color |
|
21,343 |
|
|
- |
|
|
21,343 |
|
|
24,584 |
|
|
- |
|
|
24,584 |
|
||||||
|
5,889 |
|
|
- |
|
|
5,889 |
|
|
6,615 |
|
|
- |
|
|
6,615 |
|
|||||||
| Corporate & Other |
|
(37,228 |
) |
|
27,841 |
|
|
(9,387 |
) |
|
(11,469 |
) |
|
(2,532 |
) |
|
(14,001 |
) |
||||||
| Consolidated | $ |
8,063 |
|
$ |
27,841 |
|
$ |
35,904 |
|
$ |
41,225 |
|
$ |
(2,532 |
) |
$ |
38,693 |
|
||||||
| Results by Segment | Year Ended December 31, | |||||||||||||||||||||||
| Adjusted | Adjusted | |||||||||||||||||||||||
| Operating Income | 2023 |
|
Adjustments(2) |
|
2023 |
|
2022 |
|
Adjustments(2) |
|
2022 |
|||||||||||||
| Flavors & Extracts | $ |
87,773 |
|
$ |
- |
|
$ |
87,773 |
|
$ |
105,424 |
|
$ |
- |
|
$ |
105,424 |
|
||||||
| Color |
|
105,370 |
|
|
- |
|
|
105,370 |
|
|
114,619 |
|
|
- |
|
|
114,619 |
|
||||||
|
30,800 |
|
|
- |
|
|
30,800 |
|
|
29,492 |
|
|
- |
|
|
29,492 |
|
|||||||
| Corporate & Other |
|
(68,920 |
) |
|
27,841 |
|
|
(41,079 |
) |
|
(52,784 |
) |
|
(2,532 |
) |
|
(55,316 |
) |
||||||
| Consolidated | $ |
155,023 |
|
$ |
27,841 |
|
$ |
182,864 |
|
$ |
196,751 |
|
$ |
(2,532 |
) |
$ |
194,219 |
|
||||||
| (2) For Operating Income, adjustments consist of divestiture & other related income in 2022 and portfolio optimization plan costs in 2023. | ||||||||||||||||||||||||
| Sensient Technologies Corporation | |||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Reconciliation of Non-GAAP Amounts | |||||||||||||||||
| The following table summarizes the percentage change in the 2023 results compared to the 2022 results for the corresponding periods. | |||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||
| Revenue | Total | Foreign Exchange Rates | Adjustments(3) | Adjusted Local Currency | |||||||||||||
| Flavors & Extracts |
|
|
|
|
|
|
N/A |
|
|
|
|||||||
| Color |
|
( |
|
|
|
|
N/A |
|
|
( |
|||||||
|
( |
|
|
|
|
N/A |
|
|
( |
||||||||
| Total Revenue |
|
|
|
|
|
|
N/A |
|
|
( |
|||||||
|
|
|
|
|
|
|
|||||||||||
| Operating Income |
|
|
|
|
|
|
|
||||||||||
| Flavors & Extracts |
|
( |
|
|
|
|
|
|
|
( |
|||||||
| Color |
|
( |
|
|
|
|
|
|
|
( |
|||||||
|
( |
|
|
|
|
|
|
|
( |
||||||||
| Corporate & Other |
|
|
|
|
|
|
|
|
|
( |
|||||||
| Total Operating Income |
|
( |
|
|
|
|
( |
|
|
( |
|||||||
| Diluted Earnings Per Share |
|
( |
|
|
|
|
( |
|
|
( |
|||||||
| Adjusted EBITDA |
|
( |
|
|
|
|
N/A |
|
|
( |
|||||||
|
|
|
|
|
|
|
|||||||||||
Year Ended December 31, |
|||||||||||||||||
| Revenue | Total |
|
Foreign Exchange Rates |
|
Adjustments(3) |
|
Adjusted Local Currency |
||||||||||
| Flavors & Extracts |
|
|
|
|
|
|
N/A |
|
|
( |
|||||||
| Color |
|
|
|
|
|
|
N/A |
|
|
( |
|||||||
|
|
|
|
( |
|
N/A |
|
|
|
||||||||
| Total Revenue |
|
|
|
|
|
|
N/A |
|
|
|
|||||||
|
|
|
|
|
|
|
|||||||||||
| Operating Income |
|
|
|
|
|
|
|
||||||||||
| Flavors & Extracts |
|
( |
|
|
|
|
|
|
|
( |
|||||||
| Color |
|
( |
|
|
|
|
|
|
|
( |
|||||||
|
|
|
|
( |
|
|
|
|
|
||||||||
| Corporate & Other |
|
|
|
|
|
|
|
|
|
( |
|||||||
| Total Operating Income |
|
( |
|
|
|
|
( |
|
|
( |
|||||||
| Diluted Earnings Per Share |
|
( |
|
|
|
|
( |
|
|
( |
|||||||
| Adjusted EBITDA |
|
( |
|
|
|
|
N/A |
|
|
( |
|||||||
| (3) For Operating Income, Diluted Earnings per Share, and Adjusted EBITDA, adjustments consist divestiture & other related income in 2022 and portfolio optimization plan costs in 2023. | |||||||||||||||||
| The following table summarizes the reconciliation between Operating Income (GAAP) and Adjusted EBITDA for the three months and year ended December 31, 2023 and 2022. | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
|||||||
| Operating income (GAAP) | $ |
8,063 |
$ |
41,225 |
( |
$ |
155,023 |
$ |
196,751 |
( |
|||||||
| Depreciation and amortization |
|
14,460 |
|
13,205 |
|
57,820 |
|
52,467 |
|||||||||
| Share-based compensation expense |
|
1,648 |
|
3,662 |
|
8,933 |
|
16,138 |
|||||||||
| Divestiture & other related income, before tax |
|
- |
|
(2,532) |
|
- |
|
(2,532) |
|||||||||
| Portfolio optimization plan costs, before tax |
|
27,841 |
|
- |
|
27,841 |
|
- |
|||||||||
| Adjusted EBITDA | $ |
52,012 |
$ |
55,560 |
( |
$ |
249,617 |
$ |
262,824 |
( |
|||||||
| Sensient Technologies Corporation | |||||||||
| (In thousands, except percentages) | |||||||||
| (Unaudited) | |||||||||
| Reconciliation of Non-GAAP Amounts - Continued | |||||||||
| The following table summarizes the reconciliation between Debt (GAAP) and Net Debt, and Operating Income (GAAP) and Credit Adjusted EBITDA for the year ended December 31, 2023 and 2022. | |||||||||
| Year Ended December 31, | |||||||||
| Debt | 2023 |
2022 |
|||||||
| Short-term borrowings | $ |
13,460 |
|
$ |
20,373 |
|
|||
| Long-term debt |
|
645,085 |
|
|
630,331 |
|
|||
| Credit Agreement adjustments(1) |
|
(16,743 |
) |
|
(10,180 |
) |
|||
| Net Debt | $ |
641,802 |
|
$ |
640,524 |
|
|||
| Operating income (GAAP) | $ |
155,023 |
|
$ |
196,751 |
|
|||
| Depreciation and amortization |
|
57,820 |
|
|
52,467 |
|
|||
| Share-based compensation expense |
|
8,933 |
|
|
16,138 |
|
|||
| Divestiture & other related income, before tax |
|
- |
|
|
(2,532 |
) |
|||
| Portfolio optimization plan costs, before tax |
|
27,841 |
|
|
- |
|
|||
| Other non-operating gains(2) |
|
(762 |
) |
|
(866 |
) |
|||
| Credit Adjusted EBITDA | $ |
248,855 |
|
$ |
261,958 |
|
|||
| Net Debt to Credit Adjusted EBITDA | 2.6x | 2.4x | |||||||
| (1) Adjustments include cash and cash equivalents, as described in the Company's Third Amended and Restated Credit Agreement (Credit Agreement), and certain letters of credit and hedge contracts. | |||||||||
| (2) Adjustments consist of certain financing transaction costs, certain non-financing interest items, and gains and losses related to certain non-cash, non-operating, and/or non-recurring items as described in the Credit Agreement. | |||||||||
| We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. | |||||||||
Category: Earnings
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207126895/en/
Amy Agallar
(414) 347-3706
investor.relations@sensient.com
Source: Sensient Technologies Corporation
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