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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 21, 2022
(Date of Report/Date of earliest event reported)

SENSIENT TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)

Wisconsin
001-07626
39-0561070
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5304
(Address and zip code of principal executive offices)

(414) 271-6755
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐





Item 2.02
Results of Operations and Financial Condition.

Sensient Technologies Corporation (the “Company”) issued a press release on October 21, 2022, disclosing its results of operations for its quarter ended September 30, 2022, and its financial condition at that date. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Item 2.02 (including Exhibit 99.1) is intended to be furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act.

Item 7.01
Regulation FD Disclosure.

On October 21, 2022, the Company also posted an updated investor presentation for its quarter ended September 30, 2022, on the “Investor Information” section of its website.  A copy of the investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

The information contained in this Item 7.01 (including Exhibit 99.2) is intended to be furnished under Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01
Financial Statements and Exhibits.

 
(d)
Exhibits. The following exhibits are furnished with this Current Report on Form 8-K:

EXHIBIT INDEX

Exhibit
Number
Description
Sensient Technologies Corporation Earnings Press Release for the Quarter Ended September 30, 2022.
Sensient Technologies Corporation Investor Presentation – Q3 2022.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
 



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 hereunto duly authorized.


SENSIENT TECHNOLOGIES CORPORATION
 
     
 
By:
/s/ John J. Manning
 
       
 
Name:
John J. Manning
 
       
 
Title:
Senior Vice President, General Counsel, and Secretary
       
 
Date:
October 21, 2022
 



EX-99.1 2 brhc10043120_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1

Contact:
Amy Agallar
 
(414) 347-3706

Sensient Technologies Corporation
Reports Results for the Quarter Ended September 30, 2022

Sensient Reaffirms its 2022 Guidance

MILWAUKEE— October 21, 2022 — 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.

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Sensient Technologies Corporation
Page 2
Earnings Release – Quarter Ended September 30, 2022
October 21, 2022


BUSINESS REVIEW

   
Reported
 
Revenue
 
Quarter
   
Year-to-Date
 
Flavors & Extracts
   
3.0
%
   
-0.5
%
Color
   
8.8
%
   
11.8
%
Asia Pacific
   
5.3
%
   
9.5
%
Total Revenue
   
4.9
%
   
4.7
%

   
Adjusted
Local Currency(1)
 
Revenue
 
Quarter
   
Year-to-Date
 
Flavors & Extracts
   
6.7
%
   
6.9
%
Color
   
14.6
%
   
16.0
%
Asia Pacific
   
14.5
%
   
17.2
%
Total Revenue
   
9.9
%
   
11.0
%
                 
(1) Adjusted local currency percentage changes are described in more detail in the "Reconciliation of Non-GAAP Amounts" at the end of this release.

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%.

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Sensient Technologies Corporation
Page 3
Earnings Release – Quarter Ended September 30, 2022
October 21, 2022


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.

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Sensient Technologies Corporation
Page 4
Earnings Release – Quarter Ended September 30, 2022
October 21, 2022


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.

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Sensient Technologies Corporation
Page 5
Earnings Release – Quarter Ended September 30, 2022
October 21, 2022


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.

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Sensient Technologies Corporation
Page 6
Earnings Release – Quarter Ended September 30, 2022
October 21, 2022


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

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Sensient Technologies Corporation
Page 7
(In thousands, except percentages and per share amounts)
(Unaudited)
 

Consolidated Statements of Earnings
 
Three Months Ended September 30,
   
Nine Months Ended September 30,
 
                                     
   
2022
   
2021
   
% Change
   
2022
   
2021
   
% Change
 
                                     
Revenue
 
$
361,076
   
$
344,287
     
4.9
%
 
$
1,088,303
   
$
1,039,816
     
4.7
%
                                                 
Cost of products sold
   
239,318
     
229,216
     
4.4
%
   
710,696
     
697,538
     
1.9
%
Selling and administrative expenses
   
74,265
     
68,113
     
9.0
%
   
222,081
     
212,670
     
4.4
%
                                                 
Operating income
   
47,493
     
46,958
     
1.1
%
   
155,526
     
129,608
     
20.0
%
Interest expense
   
3,672
     
3,037
             
9,748
     
9,792
         
                                                 
Earnings before income taxes
   
43,821
     
43,921
             
145,778
     
119,816
         
Income taxes
   
7,773
     
10,009
             
34,012
     
28,300
         
                                                 
Net earnings
 
$
36,048
   
$
33,912
     
6.3
%
 
$
111,766
   
$
91,516
     
22.1
%
                                                 
Earnings per share of common stock:
                                               
Basic
 
$
0.86
   
$
0.81
           
$
2.67
   
$
2.17
         
 
                                               
Diluted
 
$
0.85
   
$
0.80
           
$
2.65
   
$
2.16
         
                                                 
Average common shares outstanding:
                                               
Basic
   
41,896
     
42,024
             
41,885
     
42,140
         
 
                                               
Diluted
   
42,242
     
42,206
             
42,199
     
42,287
         

Results by Segment
 
Three Months Ended September 30,
   
Nine Months Ended September 30,
 
                                                 
Revenue
   
2022
     
2021
   
% Change
     
2022
     
2021
   
% Change
 
                                                 
Flavors & Extracts
 
$
187,046
   
$
181,667
     
3.0
%
 
$
559,110
   
$
561,979
     
(0.5
%)
Color
   
151,469
     
139,239
     
8.8
%
   
456,175
     
408,166
     
11.8
%
Asia Pacific
   
35,221
     
33,442
     
5.3
%
   
109,014
     
99,599
     
9.5
%
Intersegment elimination
   
(12,660
)
   
(10,061
)
           
(35,996
)
   
(29,928
)
       
                                                 
Consolidated
 
$
361,076
   
$
344,287
     
4.9
%
 
$
1,088,303
   
$
1,039,816
     
4.7
%
                                                 
Operating Income
                                               
                                                 
Flavors & Extracts
 
$
26,337
   
$
25,164
     
4.7
%
 
$
83,929
   
$
76,718
     
9.4
%
Color
   
28,200
     
27,253
     
3.5
%
   
90,035
     
79,462
     
13.3
%
Asia Pacific
   
6,952
     
6,601
     
5.3
%
   
22,877
     
19,146
     
19.5
%
Corporate & Other
   
(13,996
)
   
(12,060
)
           
(41,315
)
   
(45,718
)
       
                                                 
Consolidated
 
$
47,493
   
$
46,958
     
1.1
%
 
$
155,526
   
$
129,608
     
20.0
%

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Sensient Technologies Corporation
Page 8
(In thousands)
(Unaudited)
 

Consolidated Condensed Balance Sheets
 
September 30,
2022
   
December 31,
2021
 
             
Cash and cash equivalents
 
$
46,579
   
$
25,740
 
Trade accounts receivable
   
287,197
     
261,121
 
Inventories
   
501,382
     
411,635
 
Prepaid expenses and other current assets
   
45,582
     
42,657
 
Total Current Assets
   
880,740
     
741,153
 
                 
Goodwill & intangible assets (net)
   
404,840
     
435,009
 
Property, plant, and equipment (net)
   
440,439
     
446,478
 
Other assets
   
113,189
     
122,853
 
                 
Total Assets
 
$
1,839,208
   
$
1,745,493
 
                 
Trade accounts payable
 
$
132,904
   
$
125,519
 
Short-term borrowings
   
21,947
     
8,539
 
Other current liabilities
   
100,574
     
98,247
 
Total Current Liabilities
   
255,425
     
232,305
 
                 
Long-term debt
   
547,190
     
503,006
 
Accrued employee and retiree benefits
   
27,854
     
28,579
 
Other liabilities
   
54,225
     
43,178
 
Shareholders' Equity
   
954,514
     
938,425
 
                 
Total Liabilities and Shareholders' Equity
 
$
1,839,208
   
$
1,745,493
 

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Sensient Technologies Corporation
Page 9
(In thousands, except per share amounts)
 
(Unaudited)
 

Consolidated Statements of Cash Flows
           
Nine Months Ended September 30,
           
   
2022
   
2021
 
Cash flows from operating activities:
           
Net earnings
 
$
111,766
   
$
91,516
 
Adjustments to arrive at net cash provided by operating activities:
         
Depreciation and amortization
   
39,262
     
38,828
 
Share-based compensation expense
   
12,476
     
6,431
 
Net loss on assets
   
283
     
203
 
Loss on divestitures and other charges
   
-
     
13,774
 
Deferred income taxes
   
20,465
     
3,793
 
Changes in operating assets and liabilities:
               
Trade accounts receivable
   
(39,520
)
   
(35,290
)
Inventories
   
(112,021
)
   
(15,898
)
Prepaid expenses and other assets
   
(39,598
)
   
(15,016
)
Trade accounts payable and other accrued expenses
   
24,110
     
24,007
 
Accrued salaries, wages, and withholdings
   
1,819
     
1,763
 
Income taxes
   
(4,342
)
   
(1,155
)
Other liabilities
   
198
     
3,192
 
                 
Net cash provided by operating activities
   
14,898
     
116,148
 
                 
Cash flows from investing activities:
               
Acquisition of property, plant, and equipment
   
(51,703
)
   
(37,608
)
Proceeds from sale of assets
   
94
     
201
 
Proceeds from divestiture of businesses
   
-
     
36,790
 
Acquisition of new businesses
   
(1,048
)
   
(13,875
)
Other investing activities
   
947
     
1,348
 
                 
Net cash used in investing activities
   
(51,710
)
   
(13,144
)
                 
Cash flows from financing activities:
               
Proceeds from additional borrowings
   
187,715
     
55,589
 
Debt payments
   
(87,657
)
   
(67,534
)
Purchase of treasury stock
   
-
     
(31,467
)
Dividends paid
   
(51,681
)
   
(49,468
)
Other financing activities
   
(2,056
)
   
(582
)
                 
Net cash provided by (used in) financing activities
   
46,321
     
(93,462
)
                 
Effect of exchange rate changes on cash and cash equivalents
   
11,330
     
(1,373
)
                 
Net increase in cash and cash equivalents
   
20,839
     
8,169
 
Cash and cash equivalents at beginning of period
   
25,740
     
24,770
 
Cash and cash equivalents at end of period
 
$
46,579
   
$
32,939
 
                 
Supplemental Information
               
Nine Months Ended September 30,
   
2022
     
2021
 
                 
Dividends paid per share
 
$
1.23
   
$
1.17
 

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Sensient Technologies Corporation
Page 10
(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
 
Revenue (GAAP)
 
$
361,076
   
$
344,287
     
4.9
%
 
$
1,088,303
   
$
1,039,816
     
4.7
%
Revenue of the divested product lines
   
-
     
(1,622
)
           
-
     
(29,399
)
       
Adjusted revenue
 
$
361,076
   
$
342,665
     
5.4
%
 
$
1,088,303
   
$
1,010,417
     
7.7
%
                                                 
Operating income (GAAP)
 
$
47,493
   
$
46,958
     
1.1
%
 
$
155,526
   
$
129,608
     
20.0
%
Divestiture & other related costs  – Cost of products sold
   
-
     
-
             
-
     
28
         
Divestiture & other related costs – Selling and
administrative expenses
   
-
     
241
             
-
     
13,473
         
Operating loss (income) of the divested product lines
   
-
     
70
             
-
     
(2,398
)
       
Operational improvement plan - Selling and administrative
expenses (income)
   
-
     
483
             
-
     
(2,010
)
       
Adjusted operating income
 
$
47,493
   
$
47,752
     
(0.5
%)
 
$
155,526
   
$
138,701
     
12.1
%
                                                 
Net earnings (GAAP)
 
$
36,048
   
$
33,912
     
6.3
%
 
$
111,766
   
$
91,516
     
22.1
%
Divestiture & other related costs, before tax
   
-
     
241
             
-
     
13,501
         
Tax impact of divestiture & other related costs(1)
   
-
     
1,179
             
-
     
283
         
Net loss (earnings) of the divested product lines, before tax
   
-
     
70
             
-
     
(2,398
)
       
Tax impact of the divested product lines(1)
   
-
     
(18
)
           
-
     
590
         
Operational improvement plan costs (income), before tax
   
-
     
483
             
-
     
(2,010
)
       
Tax impact of operational improvement plan(1)
   
-
     
(115
)
           
-
     
44
         
Adjusted net earnings
 
$
36,048
   
$
35,752
     
0.8
%
 
$
111,766
   
$
101,526
     
10.1
%
                                                 
Diluted earnings per share (GAAP)
 
$
0.85
   
$
0.80
     
6.3
%
 
$
2.65
   
$
2.16
     
22.7
%
Divestiture & other related costs, net of tax
   
-
     
0.03
             
-
     
0.33
         
Results of operations of the divested product lines, net of tax
   
-
     
-
             
-
     
(0.04
)
       
Operational improvement plan costs (income), net of tax
   
-
     
0.01
             
-
     
(0.05
)
       
Adjusted diluted earnings per share
 
$
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.

- MORE -
Sensient Technologies Corporation
Page 11
(In thousands)
 
(Unaudited)
 

Reconciliation of Non-GAAP Amounts - Continued
 
Results by Segment
 
Three Months Ended September 30,
 
Revenue
 
2022
   
Adjustments(2)
   
Adjusted
2022
   
2021
   
Adjustments(2)
   
Adjusted
2021
 
                                     
Flavors & Extracts
 
$
187,046
   
$
-
   
$
187,046
   
$
181,667
   
$
(1,312
)
 
$
180,355
 
Color
   
151,469
     
-
     
151,469
     
139,239
     
(310
)
   
138,929
 
Asia Pacific
   
35,221
     
-
     
35,221
     
33,442
     
-
     
33,442
 
Intersegment elimination
   
(12,660
)
   
-
     
(12,660
)
   
(10,061
)
   
-
     
(10,061
)
                                                 
Consolidated
 
$
361,076
   
$
-
   
$
361,076
   
$
344,287
   
$
(1,622
)
 
$
342,665
 
                                                 
Operating Income
                                               
                                                 
Flavors & Extracts
 
$
26,337
   
$
-
   
$
26,337
   
$
25,164
   
$
66
   
$
25,230
 
Color
   
28,200
     
-
     
28,200
     
27,253
     
4
     
27,257
 
Asia Pacific
   
6,952
     
-
     
6,952
     
6,601
     
-
     
6,601
 
Corporate & Other
   
(13,996
)
   
-
     
(13,996
)
   
(12,060
)
   
724
     
(11,336
)
                                                 
Consolidated
 
$
47,493
   
$
-
   
$
47,493
   
$
46,958
   
$
794
   
$
47,752
 

Results by Segment
 
Nine Months Ended September 30,
 
Revenue
 
2022
   
Adjustments(2)
   
Adjusted
2022
   
2021
   
Adjustments(2)
   
Adjusted
2021
 
                                     
Flavors & Extracts
 
$
559,110
   
$
-
   
$
559,110
   
$
561,979
   
$
(27,616
)
 
$
534,363
 
Color
   
456,175
     
-
     
456,175
     
408,166
     
(1,638
)
   
406,528
 
Asia Pacific
   
109,014
     
-
     
109,014
     
99,599
     
(295
)
   
99,304
 
Intersegment elimination
   
(35,996
)
   
-
     
(35,996
)
   
(29,928
)
   
150
     
(29,778
)
                                                 
Consolidated
 
$
1,088,303
   
$
-
   
$
1,088,303
   
$
1,039,816
   
$
(29,399
)
 
$
1,010,417
 
                                                 
                                                 
Operating Income
                                               
                                                 
Flavors & Extracts
 
$
83,929
   
$
-
   
$
83,929
   
$
76,718
   
$
(2,859
)
 
$
73,859
 
Color
   
90,035
     
-
     
90,035
     
79,462
     
548
     
80,010
 
Asia Pacific
   
22,877
     
-
     
22,877
     
19,146
     
(87
)
   
19,059
 
Corporate & Other
   
(41,315
)
   
-
     
(41,315
)
   
(45,718
)
   
11,491
     
(34,227
)
                                                 
Consolidated
 
$
155,526
   
$
-
   
$
155,526
   
$
129,608
   
$
9,093
   
$
138,701
 

(2) For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income.

- MORE -
Sensient Technologies Corporation
Page 12
(In thousands, except percentages)
 
(Unaudited)
 

Reconciliation of Non-GAAP Amounts - Continued

The following tables summarize the percentage change in the 2022 results compared to the 2021 results for the corresponding periods.
 
   
Three Months Ended September 30,
 
Revenue
 
Total
   
Foreign Exchange Rates
   
Adjustments(3)
   
Adjusted Local Currency
 
Flavors & Extracts
   
3.0
%
   
(2.9
%)
   
(0.8
%)
   
6.7
%
Color
   
8.8
%
   
(5.5
%)
   
(0.3
%)
   
14.6
%
Asia Pacific
   
5.3
%
   
(9.2
%)
   
0.0
%
   
14.5
%
Total Revenue
   
4.9
%
   
(4.4
%)
   
(0.6
%)
   
9.9
%
                                 
Operating Income
                               
Flavors & Extracts
   
4.7
%
   
(1.1
%)
   
0.2
%
   
5.6
%
Color
   
3.5
%
   
(7.4
%)
   
0.0
%
   
10.9
%
Asia Pacific
   
5.3
%
   
(11.0
%)
   
0.0
%
   
16.3
%
Corporate & Other
   
16.0
%
   
(0.1
%)
   
(7.4
%)
   
23.5
%
Total Operating Income
   
1.1
%
   
(6.5
%)
   
1.8
%
   
5.8
%
Diluted Earnings Per Share
   
6.3
%
   
(6.3
%)
   
5.5
%
   
7.1
%
Adjusted EBITDA
   
2.2
%
   
(5.6
%)
   
N/A
     
7.8
%

   
Nine Months Ended September 30,
 
Revenue
 
Total
   
Foreign Exchange Rates
   
Adjustments(3)
   
Adjusted Local Currency
 
Flavors & Extracts
   
(0.5
%)
   
(2.4
%)
   
(5.0
%)
   
6.9
%
Color
   
11.8
%
   
(3.8
%)
   
(0.4
%)
   
16.0
%
Asia Pacific
   
9.5
%
   
(7.4
%)
   
(0.3
%)
   
17.2
%
Total Revenue
   
4.7
%
   
(3.3
%)
   
(3.0
%)
   
11.0
%
                                 
Operating Income
                               
Flavors & Extracts
   
9.4
%
   
(1.2
%)
   
(4.0
%)
   
14.6
%
Color
   
13.3
%
   
(4.9
%)
   
0.9
%
   
17.3
%
Asia Pacific
   
19.5
%
   
(9.6
%)
   
(0.5
%)
   
29.6
%
Corporate & Other
   
(9.6
%)
   
0.0
%
   
(30.4
%)
   
20.8
%
Total Operating Income
   
20.0
%
   
(5.1
%)
   
8.4
%
   
16.7
%
Diluted Earnings Per Share
   
22.7
%
   
(5.1
%)
   
12.8
%
   
15.0
%
Adjusted EBITDA
   
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.

The following table summarizes the reconciliation between Operating Income (GAAP) and Adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021.

   
Three Months Ended September 30,
   
Nine Months Ended September 30,
 
                                     
   
2022
   
2021
   
% Change
   
2022
   
2021
   
% Change
 
Operating income (GAAP)
 
$
47,493
   
$
46,958
     
1.1
%
 
$
155,526
   
$
129,608
     
20.0
%
Depreciation and amortization
   
13,082
     
13,011
             
39,262
     
38,828
         
Depreciation and amortization, divested product lines
   
-
     
(49
)
           
-
     
(146
)
       
Share-based compensation expense
   
3,785
     
2,243
             
12,476
     
6,431
         
Divestiture & other related costs, before tax
   
-
     
241
             
-
     
13,501
         
Results of operations of the divested product lines, before tax
   
-
     
70
             
-
     
(2,398
)
       
Operational improvement plan costs (income), before tax
   
-
     
483
             
-
     
(2,010
)
       
Adjusted EBITDA
 
$
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.



EX-99.2 3 brhc10043120_ex99-2.htm EXHIBIT 99.2
Exhibit 99.2

 Third Quarter 2022 Investor Presentation 
 

 FORWARD-LOOKING STATEMENTS  2  This document contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2022 Financial Outlook” in this presentation. 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 presentation contains time-sensitive information that reflects management’s best analysis only as of the date of this presentation. 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. 
 

 NON-GAAP FINANCIAL MEASURES  2  Within this document, the Company reports certain non-GAAP financial measures, including: (1) adjusted revenue, adjusted operating income, adjusted net earnings, adjusted EBITDA, and adjusted diluted earnings per share (which exclude divestiture & other related costs, the results of the divested product lines, and restructuring and other costs, which include operational improvement plan costs and income) (2) adjusted results by segment (which exclude divestiture & other related costs, operational improvement plan costs and income, and the results of the divested operations), (3) percentage changes in revenue, operating income, diluted earnings per share, and EBITDA on an adjusted local currency basis (which eliminate the effects that result from translating its international operations into U.S. dollars, divestiture & other related costs, the results of the divested product lines, and restructuring and other costs, which include operational improvement plan costs), and (4) adjusted EBITDA (which excludes depreciation and amortization expense, non-cash share based compensation expense, the results of the divested product lines, the divestiture & other related costs, and operational improvement plan costs and income). The Company has included each of these non- GAAP measures in order to provide additional information regarding the 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 presentation and the Company’s 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. The Company believes this information can be beneficial to investors for these same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. Refer to “Non-GAAP Financial Measures” at the end of this presentation for reconciliations and additional information. 
 

 Sensient Overview  2  Provider of customized solutions for food and beverage, pharmaceutical, and personal care customers  Global market leader offering an extensive portfolio of natural flavor and color technology platforms and solutions  Exceptional innovation & applications expertise with unique ability to service global, regional, and local customers 
 

 Innovative Technologies Creating Unique Solutions  2  Applications expertise and solutions-based selling  High impact relative to cost  Technically-driven products that are difficult to replace Strong consumer trends  Opportunities to grow organically and through M&A 
 

Focusing our portfolio and strengthening our commitment to the end markets  2  Investing in core focus areas of Flavors and Extracts, Natural Ingredients, Food and Pharmaceutical Colors, and Personal Care  Divested non-core product lines (inks, fragrances, and yogurt fruit prep  product lines) in 2020 and 2021  Expanded flavor portfolio and strengthened technical solutions capabilities  through the acquisition of Flavor Solutions, Inc. on July 15, 2021  Strengthened extensive natural cololor portfolio by acquiring Endemix, a vertically integrated natural color and extracts company, in October 2022
 

 Natural solutions provider focused on consistent and sustainable supply chain  2  Provider of natural solutions to support health & wellness and clean label consumer trends  Robust agronomy program ensures responsible procurement and traceability of sustainable ingredients  Committed to delivering safe, authentic, high-quality natural products through Sensient’s CertasureTM program 
 

 8  Global Revenue by Group  2021 Global Revenues include intercompany sales which are eliminated on a consolidated basis.  *Adj. Revenue is a Non-GAAP metric, please see our GAAP to Non-GAAP Reconciliation at the end of this document.  Color Group  2021 Revenue: $545M 2021 Adj. Revenue*: $543M Core Areas of Focus: Food and Pharmaceutical Colors and Personal Care  Flavors & Extracts Group  2021 Revenue: $739M 2021 Adj. Revenue*: $712M Core Areas of Focus: Natural Flavors, Extracts and Natural Ingredients  Asia Pacific Group  2021 Revenue: $135M 2021 Adj. Revenue*: $135M Core Areas of Focus: Flavors and Colors for food and beverage 
 

 9  Global market leader  Natural color innovator  Excellent innovation & applications expertise  Color Group 
 

 10  Color Overview  Food and Pharmaceutical  LC Revenue Change*  Q3 ’22  YTD ’22  +16.4%  +17.5%  Market trend toward natural colors in food and beverage  Unique value proposition for Pharmaceutical customers includes  colors, flavors, coatings, and extracts  Personal Care 29% of  Segment Revenue 29% of Adj. Segment Revenue  LC Revenue  Q3 ’22  YTD ’22  Change* • Demand for innovative products with multiple benefits  +8.4% • Product line includes dyes, pigments, formulation aides and  +11.2% ingredients for color cosmetics, hair care, and skin care  2021 Revenue: $545M 2021 Adj. Revenue*: $543M  71% of Segment Revenue 71% of Adj. Segment Revenue  *Local-currency (LC) revenue and adjusted revenue are Non-GAAP metrics, please see our GAAP to Non- GAAP Reconciliation at the end of this document. 
 

 11  Flavors & Extracts Group  Broad product offering  Unique ability to service global, regional, and local customers  Leading technology platforms  Outstanding applications expertise 
 

 12  Flavors & Extracts Overview  Flavors, Extracts, and Flavor Ingredients  62% of Segment Revenue 64% of Adj. Segment Revenue  LC Revenue Change* Q3 ’22 +11.3%  YTD ’22 +13.0%  Opportunities for on trend products with extracts, taste modulation, and natural flavors  Natural  Ingredients  35% of Segment Revenue 36% of Adj. Segment Revenue  LC Revenue Change*  Q3 ’22 (1.7%)  YTD ’22 (4.6%)  Leading provider of dehydrated onion, garlic, and other products  Temporary headwind due to a limited supply of onion and strong onion sales in 2021.  Fragrances & Yogurt Fruit Prep  3% of Segment Revenue  Yogurt Fruit Prep divested September 2020  Fragrances divested April 2021  2021 Revenue: $739M 2021 Adj. Revenue*: $712M  *Local-currency (LC) revenue and adjusted revenue are Non-GAAP metrics, please see our GAAP to Non- GAAP Reconciliation at the end of this document. 
 

 13  Asia Pacific Group  Portfolio of food and beverage flavors and colors  R&D centers in Singapore, Thailand, and China to support local and regional customer base  Ability to deliver localized solutions  and technology platforms 
 

 14  2021 adjusted revenue* of $135 million and adjusted operating income* of $26 million  Sensient’s sales of flavors and colors for Food and Pharmaceutical are managed on a geographic basis and reported as a separate segment  Manufacturing capabilities in Australia, New Zealand, China, Japan, Philippines, Thailand, and India  Q3 2022 local currency adjusted revenue* and operating profit*  improved 14.5% and 16.3%, respectively  * Adjusted revenue, local currency adjusted revenue, adjusted operating income, and local currency adjusted operating profit are Non-GAAP metrics.  Please see our GAAP to Non-GAAP Reconciliation at the end of this document.  Asia Pacific Overview 
 

 15  2022 Q3 Segment Results  Color Group reported higher revenue in the quarter due to double digit growth in Food and Pharmaceutical and high single digit growth in Personal Care. Operating income was up due to pricing and volume growth.  Flavors & Extracts Group third quarter revenue increased as a result of pricing actions across the Group. Operating income was up as a result of pricing actions offset by higher raw material costs.  Asia Pacific Group third quarter revenue increased double digits driven by volume growth in almost all regions and pricing actions. Operating income improved in the quarter due to volume growth and pricing actions.  Local Currency Adjusted Operating  Income*  Q3  YTD  Color  +10.9%  +17.3%  Flavors & Extracts  +5.6%  +14.6%  Asia Pacific  +16.3%  +29.6%  Local Currency Adjusted Revenue*  Local Currency Adjusted* Commentary:  Q3  YTD  Color  +14.6%  +16.0%  Flavors & Extracts  +6.7%  +6.9%  Asia Pacific  +14.5%  +17.2%  * Local-currency (LC) adjusted revenue and adjusted operating income are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

 16  2022 Q3 Consolidated Results  Q3  YTD  Local Currency Adjusted Revenue*  +9.9%  +11.0%  Local Currency Adjusted Operating Income*  +5.8%  +16.7%  Local Currency Adjusted Diluted EPS*  +7.1%  +15.0%  Local Currency Adjusted EBITDA*  +7.8%  +16.8%  Q3 consolidated local currency adjusted revenue increased due to pricing actions across the groups and volume growth in the Color and Asia Pacific Groups. Flavors & Extracts volumes have been impacted by limited availability of onion. This supply situation has improved throughout 2022 and Q3 saw modest sequential improvement in volumes with additional improvement expected in Q4.  Q3 consolidated local currency adjusted operating income was up due to pricing actions across all of the groups and the volume growth in the Color and Asia Pacific Groups. The operating income improvement was partially offset due to higher year-over-year Corporate expenses related to performance-based compensation.  * Local-currency (LC) adjusted revenue, adjusted operating income, adjusted diluted EPS, and adjusted EBITDA are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

 Capital Allocation  Prioritize ROI capital projects  Maintain financial flexibility to pursue  M&A  Dividend payout increased 5.1% in 2021  Excess capital returned to shareholders  through opportunistic share repurchases  $87  $77  $43  $54  $57  $62  $66  $67  $56  $51  $39  $52  $61  $31  $14  $9  $87  $118  $-  $50  $100  $150  $200  $250  2017  2018  2019  2020  2021  DOLLARS IN MILLIONS  Share Repurchase  Acquisitions  Dividends  Debt Repayments  Capital Expenditures  17 
 

 2022 Financial Outlook  17  Metric  Revised  Guidance*  Previous  Guidance*  Comments  Diluted EPS (GAAP)  No Change  High-teen growth  At current rates, we anticipate a FX headwind of approximately 20 cents  Local Currency Diluted EPS*  No Change  High single to double-digit growth  Local Currency Revenue*  No Change  High single-digit growth  Adjusted Local Currency EBITDA*  No Change  High single to double-digit growth  Excludes the impact of share-based stock compensation  *In 2022, the Company does not anticipate any impact to the above metrics as a result of divestiture & other related costs, operational improvement plan  costs, or the results of the divested operations.  The 2022 Local Currency Diluted EPS, Local Currency Revenue and Adjusted Local Currency EBITDA growth rates for 2022 are compared to the 2021 Adjusted Diluted EPS, Adjusted Revenue and Adjusted EBITDA, respectively, which excluded the divestiture & other related costs, operational improvement plan costs and the results of operations of the divested product lines. Adjusted revenue, adjusted diluted EPS and adjusted EBITDA are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

 Why Invest?  Strong competitive position  Defensible and ‘sticky’ business (& low portion of  customer costs)  Global presence  Exposure to stable and growing markets Focused on improving returns and on growth  17 
 

 APPENDIX*  *Amounts in thousands, except percentages and per share amounts 
 

 ESG Information  Click here to access our  Environmental  Sensient is committed to the principles of sound environmental stewardship and the responsible and sustainable use of energy and natural resources.  Long-term goals to reduce Energy, Water, and Hazardous Waste intensity  Seed-to-shelf program focused on sustainable supply chain  Emphasis on new products and technologies that minimize waste and environmental impacts  Chemical Risk Strategy implemented to identify and reduce risk in our portfolio  Social  Sensient strives to conduct business in an ethical manner and to make a positive contribution to society through our product offerings and business activities.  Sensient’s Code of Conduct and Supplier Code of Conduct require strong ethical behavior, fair employment practices, and strict human rights practices and product safety standards  Robust product, environmental, and raw material safety programs designed to exceed industry standards  Raw material traceability and sustainability programs  Support for our local communities through volunteerism, financial donations, sponsorships, and employee education opportunities  Governance  Sensient is committed to maintaining the highest standards of professional conduct and strong corporate  governance practices through our comprehensive corporate governance framework.  Board comprised of a majority of independent directors with diverse and accomplished backgrounds  Committed to board diversity and refreshment, we were recognized by 50/50 Women on Boards for the tenth year in a row and we have added seven new directors since 2014.  Robust Code of Conduct built on a foundation of ethics, safety and quality, and professionalism resulting in ethical and lawful conduct of our business  21 
 

 22  Non-GAAP Financial Measures  Note: EPS Calculations may not foot due to rounding differences  Three Months Ended September 30, 2022  Three Months Ended September 30, 2021  Nine Months Ended September 30, 2022  Nine Months Ended September 30, 2021  Year Ended December 31, 2021  * Tax impact adjustments were determined based on the nature of the underlying Non-GAAP adjustments and their relevant jurisdictional tax rates.  Revenue (GAAP)  $  361,076  $  344,287  $  1,088,303  $  1,039,816  $  1,380,264  Revenue of the divested product lines   -    (12,660)   -    (29,399)   (30,062)  Adjusted revenue   $ 361,076   $ 331,627  $ 1,088,303  $ 1,010,417  $ 1,350,202  Operating income (GAAP)  $  47,493  $  46,958  $  155,526  $  129,608  $  170,028  Divestiture & other related costs – Cost of products sold  - -  -  28  86  Divestiture & other related costs – Selling and administrative expenses  - 241  -  13,473  14,052  Operating loss (income) of the divested product lines  - 70  -  (2,398)  (1,880)  Operational improvement plan - Selling and administrative expenses (income)   - 483    -    (2,010)   (1,895)  Adjusted operating income   $ 47,493   $  47,752  $  155,526  $  138,701  $  180,391  Net earnings (GAAP)  $  36,048  $  33,912  $ 111,766  $  91,516  $ 118,745  Divestiture & other related costs, before tax  -  241  -  13,501  14,138  Tax impact of divestiture & other related costs *  -  1,179  -  283  2,092  Net loss (earnings) of the divested product lines, before tax  -  70  -  (2,398)  (1,880)  Tax impact of the divested product lines *  -  (18)  -  590  460  Operational improvement plan costs (income), before tax  -  483  -  (2,010)  (1,895)  Tax impact of operational improvement plan *   -    (115)   -    44    471   Adjusted net earnings   $ 36,048   $ 35,752  $ 111,766  $ 101,526  $ 132,131  Diluted earnings per share (GAAP)  $  0.85  $  0.80  $  2.65  $  2.16  $  2.81  Divestiture & other related costs, net of tax  -  0.03  -  0.33  0.38  Results of operations of the divested product lines, net of tax  -  0.00  -  (0.04)  (0.03)  Operational improvement plan income, net of tax   -    0.01    - (0.05)   (0.03)  Adjusted diluted earnings per share   $ 0.85   $ 0.85  $ 2.65 $ 2.40  $ 3.13 
 

 Non-GAAP Financial Measures (Cont’d)  Revenue  Total  Foreign  Exchange Rates  Adjustments*  Adjusted  Local Currency  Total  Foreign  Exchange Rates  Adju  A  Flavors & Extracts  3.0%  (2.9%)  (0.8%)  6.7%  (0.5%)  (2.4%)  Color  8.8%  (5.5%)  (0.3%)  14.6%  11.8%  (3  Asia Pacific  5.3%  (9.2%)  0.0%  14.5%  9.5%  Total Revenue  4.9%  (4.4%)  (0.6%)  9.9%  4.7  Operating Income  Flavors & Extracts  4.7%  (1.1%)  0.2%  Color  3.5%  (7.4%)  0.0%  Asia Pacific  5.3%  (11.0%)  Corporate & Other  16.0%  (0.1%)  Total Operating Income  1.1%  Diluted Earnings Per Share  6.3%  Adjusted EBITDA  * For Reven adju   Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022   29 
 

 Non-GAAP Financial Measures (Cont’d)  29  Note: *Fragrances was divested in April 2021, Inks was divested in June 2020, and Yogurt Fruit Prep was divested in September 2020.  Revenue  Total  Exchange  Rates  Local  Currency  Total  Exchang  Flavors, Extracts and Flavor Ingredients  6.7%  (4.6%)  11.3%  9.6%  Natural Ingredients  (1.7%)  0.0%  (1.7%)  Fragrances*  (100.0%)  0.0%  (10  Yogurt Fruit Prep*  (100.0%)  0.0%  Flavors & Extracts Group  3.0%  Food and Pharmaceutical  11.5%  Personal Care  Inks*  Color Group  Asia Pacific  Total reven  div   Three Months Ended September 30, 2022 Foreign   Nine Months Ended September 30, 202  Foreign 
 

 Non-GAAP Financial Measures (Cont’d)  * For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income.  Results by Segment Three Months Ended September 30,   Revenue   2022    Adjustments*   Adjusted   2022    2021    Adjustments*   Adjusted   2021   Flavors & Extracts  $ 187,046  $ -  $ 187,046  $ 181,667  $ (1,312)  $ 180,355  Color  151,469  -  151,469  139,239  (310)  138,929  Asia Pacific  35,221  -  35,221  33,442  -  33,442  Intersegment elimination   (12,660)   -    (12,660)   (10,061)   -    (10,061)  Consolidated   $ 361,076   $ -  $ 361,076  $ 344,287  $ (1,622)  $ 342,665  Operating Income  Flavors & Extracts  $ 26,337  $ -  $ 26,337  $ 25,164  $ 66  $ 25,230  Color  28,200  -  28,200  27,253  4  27,257  Asia Pacific  6,952  -  6,952  6,601  -  6,601  Corporate & Other   (13,996)   -    (13,996)   (12,060)   724    (11,336)  Consolidated   $ 47,493   $ -  $ 47,493  $ 46,958  $ 794  $ 47,752  29 
 

 Non-GAAP Financial Measures (Cont’d)  Results by Segment Nine Months Ended September 30,   * For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income.  Revenue   2022    Adjustments*   Adjusted   2022    2021    Adjustments*   Adjusted   2021   Flavors & Extracts  $ 559,110  $ -  $ 559,110  $ 561,979  $ (27,616)  $ 534,363  Color  456,175  -  456,175  408,166  (1,638)  406,528  Asia Pacific  109,014  -  109,014  99,599  (295)  99,304  Intersegment elimination   (35,996)   -    (35,996)   (29,928)   150    (29,778)  Consolidated   $ 1,088,303   $ -  $ 1,088,303  $ 1,039,816  $ (29,399)  $ 1,010,417  Operating Income  Flavors & Extracts  $ 83,929  $ -  $ 83,929  $ 76,718  $ (2,859)  $ 73,859  Color  90,035  -  90,035  79,462  548  80,010  Asia Pacific  22,877  -  22,877  19,146  (87)  19,059  Corporate & Other   (41,315)  -  (41,315)  (45,718)  11,491  (34,227)  Consolidated   $ 155,526   $ -  $ 155,526  $ 129,608  $ 9,093  $ 138,701  29 
 

 Non-GAAP Financial Measures (Cont’d)  Results by Segment   Year Ended December 31,   Adjusted  * For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, adjustments consist of the results of the divested product lines, divestiture & other related costs, and operational improvement plan costs and income.  Revenue   2021    Adjustments*   2021   Flavors & Extracts  $ 739,427  $ (27,837)  $ 711,590  Color  545,270  (2,080)  543,190  Asia Pacific  135,348  (295)  135,053  Intersegment elimination   (39,781)   150    (39,631)  Consolidated   $ 1,380,264   $ (30,062)  $ 1,350,202  Operating Income  Flavors & Extracts  $ 98,660  $ (2,368)  $ 96,292  Color  103,575  575  104,150  Asia Pacific  26,330  (87)  26,243  Corporate & Other   (58,537)   12,243    (46,294)  Consolidated   $ 170,028   $ 10,363  $ 180,391  29 
 

 Non-GAAP Financial Measures (Cont’d)  2022  2021  % Change  2022  2021  % Change  Operating income (GAAP)  $ 47,493  $ 46,958  1.1%  $ 155,526  $ 129,608  20.0%  Depreciation and amortization  13,082  13,011  39,262  38,828  Depreciation and amortization, divested product lines  -  (49)  -  (146)  Share-based compensation expense  3,785  2,243  12,476  6,431  Divestiture & other related costs, before tax  -  241  -  13,501  Results of operations of the divested product lines, before tax  -  70  -  (2,398)  Operational improvement plan costs (income), before tax   -    483       -    (2,010)  Adjusted EBITDA   $ 64,360   $ 62,957  2.2%  $ 207,264  $ 183,814  12.8%  Three Months Ended September 30,  Nine Months Ended September 30,  29 
 

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