MILWAUKEE--(BUSINESS WIRE)-- Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $334.7 million in this year’s fourth quarter compared to $318.6 million in last year’s fourth quarter. Reported operating income in the fourth quarter of 2020 was $34.8 million compared to an operating loss of $14.5 million in the fourth quarter of 2019. Reported diluted earnings per share was 59 cents in the fourth quarter of 2020 compared to a loss per share of 40 cents in the fourth quarter of 2019. Foreign currency translation increased revenue by approximately 1% and had an immaterial impact on earnings per share in the quarter.

The 2020 fourth quarter reported results include divestiture & other related costs, operational improvement plan costs, and costs associated with a one-time COVID-19 related payment to employees, which in total decreased fourth quarter net earnings by $3.2 million ($0.07 per diluted share). The 2019 fourth quarter results include divestiture & other related costs which decreased net earnings by $43.2 million ($1.02 per diluted share). The 2020 and 2019 fourth quarter results also include the operations of the product lines divested or to be divested, which increased diluted earnings per share by $0.06 in the fourth quarter of 2020 and $0.01 in the fourth quarter of 2019. These adjustments are described in more detail under “Reconciliation of Non-GAAP Amounts” at the end of this release.

The Flavors & Extracts Group reported fourth quarter revenue of $189.1 million compared to $169.1 million reported in the comparable period last year, an increase of 11.8%. Adjusted local currency revenue increased 14.0% in the quarter. The higher revenue was primarily the result of continued growth in natural ingredients and flavors, extracts, and flavor ingredients. Segment operating income was $23.5 million in the current quarter compared to $14.2 million reported in the comparable period last year, an increase of 65.7%. Adjusted local currency operating profit increased 54.9%. The Group’s higher profit was primarily a result of the higher volumes and the favorable impact of the Group’s cost reduction initiatives, offset by higher raw material costs in natural ingredients. Foreign currency translation increased segment revenue by approximately 1% and had an immaterial impact on operating income in the quarter.

The Color Group reported revenue of $119.8 million in the quarter compared to $125.4 million in last year’s comparable period, a decrease of 4.4%. Adjusted local currency revenue increased 1.1% in the quarter. The Group continued to experience growth in food and pharmaceutical colors; however, this growth was offset by lower volumes in the personal care business, primarily as a result of the continued lower demand for makeup during the COVID-19 pandemic. Segment operating income was $20.5 million in the quarter compared to $19.7 million in last year’s comparable period, an increase of 4.4%. Adjusted local currency operating income was up 0.5% to prior year. Despite double-digit growth rates in food and pharmaceutical colors profit, the lower volumes in personal care continued to negatively impact the Color Group’s operating income in the quarter. Foreign currency translation increased segment revenue and operating income by approximately 1% in the quarter.

The Asia Pacific Group reported revenue of $32.2 million in the quarter compared to $30.6 million in last year’s comparable period, an increase of 5.1%. Adjusted local currency revenue increased 2.8% in the quarter. Segment operating income was $6.0 million in the quarter compared to $5.6 million in last year’s comparable quarter, an increase of 8.8%. Adjusted local currency operating income increased 7.8% in the quarter. The higher profit was primarily a result of the favorable volume growth. Foreign currency translation increased segment revenue and operating income by approximately 3% and 1%, respectively, in the quarter.

Corporate & Other reported operating costs of $15.3 million in the current quarter compared to $53.9 million in last year’s comparable period. The lower costs are primarily due to lower divestiture & other costs reported in the fourth quarter of 2020 compared to the amount recorded in the fourth quarter of 2019.

Cash provided by operating activities was $75.9 million for the fourth quarter of 2020 compared to $49.6 million in the fourth quarter of 2019, an increase of 52.9%. Total debt decreased by $34.3 million during the fourth quarter of 2020.

2021 OUTLOOK

Sensient expects 2021 full year GAAP diluted earnings per share to grow at a mid to high single digit growth rate compared to the Company’s 2020 reported GAAP diluted earnings per share of $2.59. Our full year 2021 guidance includes approximately 25 to 30 cents per share of estimated divestiture & other related costs, the results of the operations to be divested, and the operational improvement plan costs.

The Company expects 2021 adjusted local currency revenue ⁽²⁾ to grow at a low to mid-single digit rate and adjusted local currency EBITDA ⁽²⁾ to grow at a mid-single digit rate. The Company also expects, on a local currency basis, 2021 adjusted diluted earnings per share ⁽²⁾ to grow at a mid-single digit growth rate compared to the Company’s 2020 adjusted diluted earnings per share of $2.79.

The Company expects earnings per share reported on a U.S. dollar basis to benefit by approximately ten cents based on current exchange rates.

The Company’s guidance is based upon current trends and the effects of COVID-19 to date. The full impacts of the ongoing COVID-19 pandemic remain uncertain and management will continue to monitor its impacts 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, COVID-19 employee payment costs, and the results of the operations divested or to be divested. 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 2020 fourth quarter and year end financial results at 8:30 a.m. CST on Friday, February 12, 2021. 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 19, 2021, by calling (877) 344-7529 and referring to conference identification number 10150402. 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 16, 2021.

This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2021 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 ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers, and suppliers, the availability and cost of raw materials and other supplies, the availability of logistics and transportation, governmental regulations and restrictions and 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; the effectiveness of the Company’s past restructuring activities; 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, 2019, the Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, 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

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, 2020 and 2019 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, the results of operations divested or to be divested, and the COVID-19 employee payment.

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/20210212005088/en/