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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:
March 31, 2024
 

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to
 
Commission file number: 001-07626

Sensient Technologies Corporation
(Exact name of registrant as specified in its charter)

Wisconsin
 
39-0561070
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)

777 EAST WISCONSIN AVENUE, MILWAUKEE, WISCONSIN 53202-5304
(Address of principal executive offices)

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

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 LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer   ☒
Accelerated Filer ☐
Non-Accelerated Filer ☐
Smaller Reporting Company ☐
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
 
Outstanding at April 24, 2024
Common Stock, par value $0.10 per share
 
42,364,905



SENSIENT TECHNOLOGIES CORPORATION
INDEX

   
Page No.
     
PART I. FINANCIAL INFORMATION:
 
     
Item 1.
Financial Statements:
 
 

 
 
1
 

 
 
2
 
 
 
3
 
 
 
4
 
 
 
 
5
     
 
6
     
Item 2.
12
     
Item 3.
16
     
Item 4.
16
     
PART II. OTHER INFORMATION:
 
     
Item 1.
16
     
Item 1A.
16
     
Item 2.
16
 
 
Item 5.
 16
     
Item 6
Exhibits.  16
     
 
17
     
 
18

PART I.
FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS

SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except per share amounts)
(Unaudited)

 
Three Months
Ended March 31,
 
             
   
2024
   
2023
 
             
Revenue
 
$
384,670
   
$
369,006
 
Cost of products sold
   
258,121
     
244,343
 
Selling and administrative expenses
   
77,143
     
73,825
 
Operating income
   
49,406
     
50,838
 
Interest expense
   
7,045
     
6,002
 
Earnings before income taxes
   
42,361
     
44,836
 
Income taxes
   
11,421
     
11,185
 
Net earnings
 
$
30,940
   
$
33,651
 
                 
Weighted average number of common shares outstanding:
               
Basic
   
42,104
     
41,970
 
Diluted
   
42,305
     
42,255
 
                 
Earnings per common share:
               
Basic
 
$
0.73
   
$
0.80
 
Diluted
 
$
0.73
   
$
0.80
 
                 
Dividends declared per common share
 
$
0.41
   
$
0.41
 

See accompanying notes to consolidated condensed financial statements.

1
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

 
Three Months
Ended March 31,
 
   
2024
   
2023
 
             
Comprehensive income
 
$
27,329
   
$
49,952
 

See accompanying notes to consolidated condensed financial statements.

2
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)


 
March 31,
2024
(Unaudited)
   
December 31,
2023
 
Assets
           
Current Assets:
           
Cash and cash equivalents
 
$
25,417
   
$
28,934
 
Trade accounts receivable
   
298,488
     
272,164
 
Inventories
   
568,547
     
598,399
 
Prepaid expenses and other current assets
   
50,391
     
37,119
 
                 
Total current assets
   
942,843
     
936,616
 
                 
Other assets
   
93,960
     
94,873
 
Deferred tax assets
   
38,444
     
41,564
 
Intangible assets, net
   
11,706
     
12,112
 
Goodwill
   
420,541
     
424,065
 
Property, Plant, and Equipment:
               
Land
   
31,496
     
31,901
 
Buildings
   
349,052
     
343,594
 
Machinery and equipment
   
794,891
     
781,789
 
Construction in progress
   
44,403
     
59,091
 
     
1,219,842
     
1,216,375
 
Less accumulated depreciation
   
(721,654)
   
(711,098)
     
498,188
     
505,277
 
                 
Total assets
 
$
2,005,682
   
$
2,014,507
 
                 
Liabilities and Shareholders’ Equity
               
                 
Current Liabilities:
               
Trade accounts payable
 
$
104,834
   
$
131,114
 
Accrued salaries, wages, and withholdings from employees
   
26,079
     
26,412
 
Other accrued expenses
   
52,503
     
52,024
 
Income taxes
   
16,004
     
13,296
 
Short-term borrowings
   
19,439
     
13,460
 
                 
Total current liabilities
   
218,859
     
236,306
 
                 
Deferred tax liabilities
   
14,072
     
14,260
 
Other liabilities
   
37,028
     
37,817
 
Accrued employee and retiree benefits
   
28,276
     
27,715
 
Long-term debt
   
643,511
     
645,085
 
Shareholders’ Equity:
               
Common stock
   
5,396
     
5,396
 
Additional paid-in capital
   
112,389
     
115,941
 
Earnings reinvested in the business
   
1,740,500
     
1,726,872
 
Treasury stock, at cost
   
(618,621)
   
(622,768)
Accumulated other comprehensive loss
   
(175,728)
   
(172,117)
                 
Total shareholders’ equity
   
1,063,936
     
1,053,324
 
                 
Total liabilities and shareholders’ equity
 
$
2,005,682
   
$
2,014,507
 

See accompanying notes to consolidated condensed financial statements.

3
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 
Three Months
Ended March 31,
 
   
2024
   
2023
 
             
Cash flows from operating activities:
           
Net earnings
 
$
30,940
   
$
33,651
 
Adjustments to arrive at net cash provided by operating activities:
               
Depreciation and amortization
   
14,709
     
14,150
 
Share-based compensation expense
   
1,995
     
2,267
 
Net (gain) loss on assets
   
(193
)
   
8
 
Portfolio Optimization Plan costs
    1,189       -  
Deferred income taxes
   
(4
)
   
(2,351
)
Changes in operating assets and liabilities:
               
Trade accounts receivable
   
(28,331
)
   
(7,142
)
Inventories
   
26,624
     
(4,374
)
Prepaid expenses and other assets
   
(13,655
)
   
(2,062
)
Accounts payable and other accrued expenses
   
(21,993
)
   
(19,251
)
Accrued salaries, wages, and withholdings from employees
   
29
     
(21,187
)
Income taxes
   
3,150
     
2,548
 
Other liabilities
   
674
     
698
 
                 
Net cash provided by (used in) operating activities
   
15,134
     
(3,045
)
                 
Cash flows from investing activities:
               
Acquisition of property, plant, and equipment
   
(11,030
)
   
(22,278
)
Proceeds from sale of assets
   
93
     
1
 
Other investing activities
   
(1
)
   
(602
)
                 
Net cash used in investing activities
   
(10,938
)
   
(22,879
)
                 
Cash flows from financing activities:
               
Proceeds from additional borrowings
   
38,053
     
50,827
 
Debt payments
   
(27,031
)
   
(1,351
)
Dividends paid
   
(17,312
)
   
(17,255
)
Other financing activities
   
(2,828
)
   
(7,669
)
                 
Net cash (used in) provided by financing activities
   
(9,118
)
   
24,552
 
                 
Effect of exchange rate changes on cash and cash equivalents
   
1,405
     
4,468
 
                 
Net (decrease) increase in cash and cash equivalents
   
(3,517
)
   
3,096
 
Cash and cash equivalents at beginning of period
   
28,934
     
20,921
 
Cash and cash equivalents at end of period
 
$
25,417
   
$
24,017
 

See accompanying notes to consolidated condensed financial statements.

4
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share and per share amounts)
(Unaudited)

 
   
   
   
Treasury Stock
   

   

 
Three Months Ended March 31, 2024
 
Common
Stock
   
Additional
Paid-In
Capital
   
Earnings
Reinvested
in the
Business
   
Shares
   
Amount
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Total
Equity
 
Balances at December 31, 2023
 
$
5,396
   
$
115,941
   
$
1,726,872
     
11,885,398
   
$
(622,768
)
 
$
(172,117
)
 
$
1,053,324
 
Net earnings
   
-
     
-
     
30,940
     
-
     
-
     
-
     
30,940
 
Other comprehensive loss
   
-
     
-
     
-
     
-
     
-
     
(3,611
)
   
(3,611
)
Cash dividends paid – $0.41 per share
   
-
     
-
     
(17,312
)
   
-
     
-
     
-
     
(17,312
)
Share-based compensation
   
-
     
1,995
     
-
     
-
     
-
     
-
     
1,995
 
Non-vested stock issued upon vesting
   
-
     
(5,365
)
   
-
     
(102,396
)
   
5,365
     
-
     
-
 
Benefit plans
    -       299       -       (21,405 )     1,122       -       1,421  
Other
   
-
     
(481
)
   
-
     
44,652
     
(2,340
)
   
-
     
(2,821
)
Balances at March 31, 2024
 
$
5,396
   
$
112,389
   
$
1,740,500
     
11,806,249
   
$
(618,621
)
 
$
(175,728
)
 
$
1,063,936
 

Three Months Ended March 31, 2023
                                         
Balances at December 31, 2022
  $ 5,396     $ 124,043     $ 1,702,700       12,058,773     $ (631,853 )   $ (200,688 )   $ 999,598  
Net earnings
    -       -       33,651       -       -       -       33,651  
Other comprehensive income
    -       -       -       -       -       16,301       16,301  
Cash dividends paid – $0.41 per share
    -       -       (17,255 )     -       -       -       (17,255 )
Share-based compensation
    -       2,267       -       -       -       -       2,267  
Non-vested stock issued upon vesting
    -       (11,956 )     -       (228,181 )     11,956       -       -  
Benefit plans
    -       375       -       (18,172 )     952       -       1,327  
Other
    -       (2,140 )     -       105,524       (5,528 )     -       (7,668 )
Balances at March 31, 2023
  $ 5,396     $ 112,589     $ 1,719,096       11,917,944     $ (624,473 )   $ (184,387 )   $ 1,028,221  

See accompanying notes to consolidated condensed financial statements.
5
SENSIENT TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1.
Accounting Policies

In the opinion of Sensient Technologies Corporation (the Company), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) that are necessary to present fairly the financial position of the Company as of March 31, 2024, and the results of operations, comprehensive income, cash flows, and shareholders’ equity for the three months ended March 31, 2024 and 2023. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Expenses are charged to operations in the period incurred.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to provide disclosures of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to consistently categorize, and provide greater disaggregation of, information in the rate reconciliation table and further disaggregate income tax payments by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2023, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.

2.
Portfolio Optimization Plan

During the fourth quarter of 2023, the board of directors of the Company approved a plan to undertake an effort to optimize certain production facilities and improve efficiencies within the Company (Portfolio Optimization Plan). As part of the Portfolio Optimization Plan, in the Flavors & Extracts segment, the Company began evaluating the potential closure of its manufacturing facility in Felinfach, Wales, United Kingdom, the potential closure of its sales office in Granada, Spain, and the potential centralization and elimination of certain selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. In addition, in the Color segment, the Company’s proposals include closing a manufacturing facility in Delta, British Columbia, Canada, closing a sales office in Argentina, and centralizing and eliminating certain production positions as well as potentially eliminating some selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. The Company reports all costs associated with the Portfolio Optimization Plan in the Corporate & Other segment.

The Company recorded non-cash impairment charges in Selling and Administrative Expenses, primarily related to certain property, plant, and equipment during the three months ended March 31, 2024, when the estimated fair value of these assets was lower than the carrying value. The property, plant, and equipment related to a product line that was shut down and determined to not be usable at other plant locations.

6
The Company recorded $3.4 million and $3.7 million of accrued liabilities in Other Accrued Expenses on the Company’s Consolidated Balance Sheet related to this plan as of March 31, 2024 and December 31, 2023, respectively. The Company expects this plan will cost approximately $40 million, primarily related to non-cash impairment charges and proposed employee separation costs, and upon completion would reduce annual operating costs by approximately $8 million to $10 million, with the full benefit expected to be achieved after 2025. The Company proposes to reduce headcount by approximately 120 positions, primarily in the Flavors & Extracts and Color segments, related to certain production and selling and administrative positions.

The following table summarizes the Portfolio Optimization Plan expenses by segment for the three months ended March 31, 2024:

 
(In thousands)
 
Flavors &
Extracts
   

Color
   
Corporate 
& Other
   
Consolidated
 
Non-cash impairment charges – Selling and administrative expenses
 
$
-
   
$
975
   
$
-
   
$
975
 
Non-cash charges – Cost of products sold
   
125
     
(18
)
   
-
     
107
 
Employee separation – Selling and administrative expenses
   
611
     
491
     
28
     
1,130
 
Other costs – Selling and administrative expenses(1)
   
316
     
284
     
-
     
600
 
Total
 
$
1,052
   
$
1,732
   
$
28
   
$
2,812
 


(1)
Other costs include professional services, accelerated depreciation, accelerated lease costs, and other related costs.

3.
Trade Accounts Receivable

Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions. Forecasted economic conditions have not had a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables; however, the Company will continue to monitor and evaluate the rapidly changing economic conditions. Additionally, as the Company only has one portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.

The following table summarizes the changes in the allowance for doubtful accounts during the three-month periods ended March 31, 2024 and 2023:

(In thousands)
Three Months Ended March 31, 2024
 
Allowance for
Doubtful Accounts
 
Balance at December 31, 2023
 
$
4,373
 
Provision for expected credit losses
   
307
 
Accounts written off
   
(747
)
Translation and other activity
   
(51
)
Balance at March 31, 2024
 
$
3,882
 

(In thousands)
Three Months Ended March 31, 2023
 
Allowance for
Doubtful Accounts
 
Balance at December 31, 2022
 
$
4,436
 
Provision for expected credit losses
   
120
 
Accounts written off
   
(614
)
Translation and other activity
   
103
 
Balance at March 31, 2023
 
$
4,045
 

4.
Inventories
 
At March 31, 2024, and December 31, 2023, inventories included finished and in-process products totaling $416.9 million and $437.1 million, respectively, and raw materials and supplies of $151.6 million and $161.3 million, respectively.

7
5.
Fair Value

Accounting Standards Codification 820, Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of March 31, 2024 and December 31, 2023. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was an asset of $1.4 million and $1.0 million as of March 31, 2024 and December 31, 2023, respectively. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at March 31, 2024 and December 31, 2023, was $643.6 million and $645.2 million, respectively. The fair value of the long-term debt at March 31, 2024 and December 31, 2023, was $648.6 million and $653.7 million, respectively.

6.
Segment Information

The Company evaluates performance based on operating income before share-based compensation; restructuring and other charges, including Portfolio Optimization Plan costs; interest expense; and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation.

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. The Company’s three reportable segments are the Flavors & Extracts and Color segments, which are both managed on a product line basis, and the Asia Pacific segment, which is managed on a geographic basis. The Company’s Flavors & Extracts segment produces flavor, extracts, and essential oils products that impart a desired taste, texture, aroma, or other characteristics to a broad range of consumer and other products. The Color segment produces natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications. The Asia Pacific segment is managed on a geographic basis and produces and distributes color, flavor, and essential oils products in the Asia Pacific countries. The Company’s corporate expenses, share-based compensation, and restructuring and other charges, including Portfolio Optimization Plan costs, are included in the “Corporate & Other” category.

Operating results by segment for the periods presented are as follows:

(In thousands)
 
Flavors &
Extracts
   
Color
   
Asia
Pacific
   
Corporate &
Other
   
Consolidated
 
Three months ended March 31, 2024:
                             
Revenue from external customers
 
$
188,022
   
$
156,364
   
$
40,284
   
$
-
   
$
384,670
 
Intersegment revenue
   
5,070
     
3,661
     
22
     
-
     
8,753
 
Total revenue
 
$
193,092
   
$
160,025
   
$
40,306
   
$
-
   
$
393,423
 
                                         
Operating income (loss)
 
$
23,678
   
$
31,679
   
$
8,776
   
$
(14,727
)
 
$
49,406
 
Interest expense
   
-
     
-
     
-
     
7,045
     
7,045
 
Earnings (loss) before income taxes
 
$
23,678
   
$
31,679
   
$
8,776
   
$
(21,772
)
 
$
42,361
 
                                         
Three months ended March 31, 2023:
                                       
Revenue from external customers
 
$
171,972
   
$
156,949
   
$
40,085
   
$
-
   
$
369,006
 
Intersegment revenue
   
6,880
     
4,212
     
-
     
-
     
11,092
 
Total revenue
 
$
178,852
   
$
161,161
   
$
40,085
   
$
-
   
$
380,098
 
                                         
Operating income (loss)
 
$
22,180
   
$
31,885
   
$
9,241
   
$
(12,468
)
 
$
50,838
 
Interest expense
   
-
     
-
     
-
     
6,002
     
6,002
 
Earnings (loss) before income taxes
 
$
22,180
   
$
31,885
   
$
9,241
   
$
(18,470
)
 
$
44,836
 

8
Product Lines

(In thousands)
 
Flavors &
Extracts
   
Color
   
Asia Pacific
   
Consolidated
 
Three months ended March 31, 2024
                       
Flavors, Extracts & Flavor Ingredients
 
$
124,805
   
$
-
   
$
-
   
$
124,805
 
Natural Ingredients
   
68,287
     
-
     
-
     
68,287
 
Food & Pharmaceutical Colors
   
-
     
117,058
     
-
     
117,058
 
Personal Care
   
-
     
42,967
     
-
     
42,967
 
Asia Pacific
   
-
     
-
     
40,306
     
40,306
 
Intersegment Revenue
   
(5,070
)
   
(3,661
)
   
(22
)
   
(8,753
)
Total revenue from external customers
 
$
188,022
   
$
156,364
   
$
40,284
   
$
384,670
 
                                 
Three months ended March 31, 2023:
                               
Flavors, Extracts & Flavor Ingredients
 
$
124,825
   
$
-
   
$
-
   
$
124,825
 
Natural Ingredients
   
54,027
     
-
     
-
     
54,027
 
Food & Pharmaceutical Colors
   
-
     
118,747
     
-
     
118,747
 
Personal Care
   
-
     
42,414
     
-
     
42,414
 
Asia Pacific
   
-
     
-
     
40,085
     
40,085
 
Intersegment Revenue
   
(6,880
)
    (4,212 )    
-
     
(11,092
)
Total revenue from external customers
 
$
171,972
   
$
156,949
   
$
40,085
   
$
369,006
 

Geographic Markets

(In thousands)
 
Flavors &
Extracts
   
Color
   
Asia Pacific
   
Consolidated
 
Three months ended March 31, 2024:
                       
North America
 
$
146,952
   
$
75,120
   
$
-
   
$
222,072
 
Europe
   
32,157
     
46,162
     
46
     
78,365
 
Asia Pacific
   
3,706
     
17,419
     
38,685
     
59,810
 
Other
   
5,207
     
17,663
     
1,553
     
24,423
 
Total revenue from external customers
 
$
188,022
   
$
156,364
   
$
40,284
   
$
384,670
 
                                 
Three months ended March 31, 2023:
                               
North America
 
$
131,968
   
$
78,377
   
$
62
   
$
210,407
 
Europe
   
28,927
     
43,252
     
103
     
72,282
 
Asia Pacific
   
5,201
     
18,149
     
39,195
     
62,545
 
Other
   
5,876
     
17,171
     
725
     
23,772
 
Total revenue from external customers
 
$
171,972
   
$
156,949
   
$
40,085
   
$
369,006
 

7.
Retirement Plans

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:


 
Three Months Ended
March 31,
 
(In thousands)
 
2024
   
2023
 
Service cost
 
$
372
   
$
368
 
Interest cost
    401       409  
Expected return on plan assets
   
(242
)
   
(239
)
Recognized actuarial gain
    (91 )     (139 )
Total defined benefit expense
 
$
440
   
$
399
 

The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings.

9
8.
Derivative Instruments and Hedging Activity

The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk in order to reduce the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales, and other known foreign currency exposures. These forward exchange contracts generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below.

Forward exchange contracts – Certain forward exchange contracts have been designated as cash flow hedges. The Company had $44.5 million and $58.4 million of forward exchange contracts designated as cash flow hedges outstanding as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024 and 2023, the amounts reclassified into net earnings in the Company’s Consolidated Statements of Earnings that offset the underlying transactions’ impact on earnings in the same period were not material. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges. The results of these transactions were not material to the financial statements.

Net investment hedges – The Company has designated certain foreign currency denominated long-term borrowings as partial hedges of the Company’s foreign currency net asset positions. As of March 31, 2024 and December 31, 2023, the total value of the Company’s net investment hedges was $306.7 million and $313.3 million, respectively. These net investment hedges included Euro and British Pound denominated long-term debt. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in Other Comprehensive Income (OCI). For the three months ended March 31, 2024 and 2023, the impact of foreign exchange rates on these debt instruments decreased debt by $6.6 million and increased debt by $4.4 million, respectively, which has been recorded as foreign currency translation in OCI.

9.
Income Taxes

The effective income tax rates for the three months ended March 31, 2024 and 2023, were 27.0% and 24.9%, respectively. The effective tax rates for the three months ended March 31, 2024 and 2023 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings. The effective tax rate for the three months ended March 31, 2024, was also impacted by the limited tax deductibility of costs related to the Portfolio Optimization Plan.

10.
Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three-month periods ended March 31, 2024 and 2023:

(In thousands)
 
Cash Flow
Hedges (1)
   
Pension
Items (1)
   
Foreign
Currency
Items
   
Total
 
Balances at December 31, 2023
 
$
997
   
$
(2,079
)
 
$
(171,035
)
 
$
(172,117
)
Other comprehensive income (loss) before reclassifications
   
702
     
-
     
(4,023
)
   
(3,321
)
Amounts reclassified from OCI
   
(222
)
   
(68
)
   
-
     
(290
)
Balances at March 31, 2024
 
$
1,477
   
$
(2,147
)
 
$
(175,058
)
 
$
(175,728
)

(In thousands)
 
Cash Flow
Hedges (1)
   
Pension
Items (1)
   
Foreign
Currency
Items
   
Total
 
Balances at December 31, 2022
 
$
(599
)
 
$
(1,792
)
 
$
(198,297
)
 
$
(200,688
)
Other comprehensive income before reclassifications
   
1,700
     
-
     
14,841
     
16,541
 
Amounts reclassified from OCI
   
(118
)
   
(122
)
   
-
     
(240
)
Balances at March 31, 2023
 
$
983
   
$
(1,914
)
 
$
(183,456
)
 
$
(184,387
)


(1)
Cash Flow Hedges and Pension Items are net of tax.

10
11.
Commitments and Contingencies


The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.

12.
Subsequent Event

On April 25, 2024, the Company announced its quarterly dividend of $0.41 per share would be payable on June 3, 2024.

11
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, Company performance, and financial results. Forward-looking statements include statements in the future tense, statements referring to any period after March 31, 2024, and statements including the terms “expect,” “believe,” “anticipate,” and other similar terms that express expectations as to future events or conditions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that could cause actual events to differ materially from those expressed in the forward-looking statements. A variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results. These factors and assumptions include, among others, 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 Russia and Ukraine and Israel and Hamas and other parties in the Middle East; the availability and cost of labor, logistics, and transportation; 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 Portfolio Optimization Plan; 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; the Company’s ability to enhance its innovation efforts and drive cost efficiencies; currency exchange rate fluctuations; and the matters discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Except to the extent required by applicable law, 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 therein will not be realized.

OVERVIEW

Revenue
Revenue was $384.7 million and $369.0 million for the three months ended March 31, 2024 and 2023, respectively.  The increase in revenue was primarily due to higher volumes and favorable pricing. For the three months ended March 31, 2024, foreign exchange rates had an immaterial impact on revenue.

Gross Margin
The Company’s gross margin was 32.9% and 33.8% for the three months ended March 31, 2024 and 2023, respectively. The decrease in gross margin was primarily due to higher raw material costs, partially offset by an increase in pricing.

Selling and Administrative Expenses
Selling and administrative expense as a percent of revenue was 20.1% and 20.0% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, selling and administrative expenses were increased by Portfolio Optimization Plan costs totaling $2.7 million, which increased selling and administrative expenses as a percent of revenue by approximately 70 basis points.  See Portfolio Optimization Plan below for further information. This increase was largely offset as a percent of revenue due to increased operating leverage due to revenue growth without corresponding increases in selling and administrative expenses.

Operating Income
Operating income was $49.4 million and $50.8 million for the three months ended March 31, 2024 and 2023, respectively. Operating margins were 12.8% and 13.8% for the three months ended March 31, 2024 and 2023, respectively. Portfolio Optimization Plan costs decreased operating margins by approximately 80 basis points for the three months ended March 31, 2024.

Interest Expense
Interest expense was $7.0 million and $6.0 million for the three months ended March 31, 2024 and 2023, respectively. The increase in expense was primarily due to an increase in the average interest rate.

12
Income Taxes
The effective income tax rates for the three months ended March 31, 2024 and 2023, were 27.0% and 24.9%, respectively. The effective tax rates for the three months ended March 31, 2024 and 2023, were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings. The effective tax rate for the three months ended March 31, 2024 was also impacted by the limited tax deductibility of costs related to the Portfolio Optimization Plan.

Portfolio Optimization Plan
During the fourth quarter of 2023, the board of directors of the Company approved a plan to undertake an effort to optimize certain production facilities and improve efficiencies within the Company (Portfolio Optimization Plan). As part of the Portfolio Optimization Plan, in the Flavors & Extracts segment, the Company began evaluating the potential closure of its manufacturing facility in Felinfach, Wales, United Kingdom, the potential closure of its sales office in Granada, Spain, and the potential centralization and elimination of certain selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. In addition, in the Color segment, the Company’s proposals include closing a manufacturing facility in Delta, British Columbia, Canada, closing a sales office in Argentina, and centralizing and eliminating certain production positions as well as potentially eliminating some selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. The Company reports all costs associated with the Portfolio Optimization Plan in the Corporate & Other segment.

In the three months ended March 31, 2024, the Company incurred $2.8 million related to the Portfolio Optimization Plan recorded in Corporate & Other, primarily for costs associated with employee separation and impairment of fixed assets.

NON-GAAP FINANCIAL MEASURES

Within the following tables, the Company reports certain non-GAAP financial measures, including: (1) adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share, which exclude restructuring and other costs, including the Portfolio Optimization Plan costs, and (2) percentage changes in revenue, operating income, and diluted earnings per share on an adjusted local currency basis, which eliminate the effects that result from translating its international operations into U.S. dollars and restructuring and other costs, including the Portfolio Optimization Plan costs.

The Company has included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable year-over-year 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 report. 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 the Company believes 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.

   
Three Months Ended March 31,
 
(In thousands except per share amounts)
 
2024
   
2023
   
% Change
 
Operating Income (GAAP)
 
$
49,406
   
$
50,838
     
(2.8
)%
Portfolio Optimization Plan costs – Cost of products sold
   
107
     
-
         
Portfolio Optimization Plan costs – Selling and administrative expenses
   
2,705
     
-
         
Adjusted operating income
 
$
52,218
   
$
50,838
     
2.7
%
                         
Net Earnings (GAAP)
 
$
30,940
   
$
33,651
     
(8.1
)%
Portfolio Optimization Plan costs, before tax
   
2,812
      -          
Tax impact of Portfolio Optimization Plan costs(1)
   
(355
)
    -          
Adjusted net earnings
 
$
33,397
   
$
33,651
     
(0.8
)%
                         
Diluted Earnings Per Share (GAAP)
 
$
0.73
   
$
0.80
     
(8.8
)%
Portfolio Optimization Plan costs, net of tax
   
0.06
     
-
         
Adjusted diluted earnings per share
 
$
0.79
   
$
0.80
     
(1.3
)%

(1) Tax impact adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.

Portfolio Optimization Plan costs are discussed under “Portfolio Optimization Plan” above and Note 2, Portfolio Optimization Plan, in the Notes to the Consolidated Financial Statements included in this report.

Note: Earnings per share calculations may not foot due to rounding differences.

13
The following table summarizes the percentage change for the results of the three months ended March 31, 2024, compared to the results for the three months ended March 31, 2023, in the respective financial measures.

   
Three Months Ended March 31, 2024
 
   
Total
 
Foreign
Exchange
Rates
 


Adjustments(1)
   
 Adjusted
Local
Currency
 
Revenue
                       
Flavors & Extracts
 
8.0%
   
1.1%
   
N/A
 
6.9%
 
Color
 
(0.7%)
   
1.0%
   
N/A
 
(1.7%)
 
Asia Pacific
 
0.6%
   
(3.5%)
   
N/A
 
4.1%
 
Total Revenue
 
4.2%
   
0.4%
   
N/A
 
3.8%
 
                              
Operating Income
                           
Flavors & Extracts
 
6.8%
   
0.5%
   
0.0%
 

6.3%
 
Color
 
(0.6%)
   
1.2%
   
0.0%
 

(1.8%)
 
Asia Pacific
 
(5.0%)
   
(4.4%)
   
0.0%
 

(0.6%)
 
Corporate & Other
 
18.1%
   
0.0%
   
22.5%
 
(4.4%)
 
Total Operating Income
 
(2.8%)
   
0.2%
   
(5.6%)
 
2.6%
 
Diluted Earnings per Share
 
(8.8%)
   
0.0%
   
(7.5%)
 

(1.3%)
 

(1)
 Adjustments consist of Portfolio Optimization Plan costs.

Note: Refer to table above for a reconciliation of these non-GAAP measures.

SEGMENT INFORMATION

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. Segment performance is evaluated on operating income before share-based compensation; restructuring and other costs, including the Portfolio Optimization Plan costs and other costs (which are reported in Corporate & Other); interest expense; and income taxes.

The Company’s reportable segments consist of the Flavors & Extracts, Color, and Asia Pacific segments.

Flavors & Extracts
Flavors & Extracts segment revenue was $193.1 million and $178.9 million for the three months ended March 31, 2024 and 2023, respectively, an increase of approximately 8%. The increase was primarily a result of higher revenue in Natural Ingredients, primarily due to higher volumes. Foreign exchange rates increased segment revenue by approximately 1%.

Flavors & Extracts segment operating income was $23.7 million and $22.2 million for the three months ended March 31, 2024 and 2023, respectively, an increase of approximately 7%. The higher segment operating income was a result of higher operating income in Flavors, Extracts & Flavor Ingredients, partially offset by lower operating income in Natural Ingredients. The higher operating income in Flavors, Extracts & Flavor Ingredients was primarily due to lower raw material costs and higher selling prices. The lower operating income in Natural Ingredients was primarily due to higher raw material costs, partially offset by higher volumes. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 12.3% in the current quarter compared to 12.4% in the prior year’s comparable quarter.

14
Color
Segment revenue for the Color segment was $160.0 million and $161.2 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 1%. The decrease was primarily a result of lower revenue in Food & Pharmaceutical Colors, primarily due to lower volumes, partially offset by the favorable impact of foreign exchange rates that increased segment revenue by approximately 1%.

Segment operating income for the Color segment was $31.7 million and $31.9 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 1%. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 19.8% for both the three months ended March 31, 2024 and 2023.

Asia Pacific
Segment revenue for the Asia Pacific segment was $40.3 million and $40.1 million for the three months ended March 31, 2024 and 2023, respectively, an increase of approximately 1%. Foreign exchange rates decreased segment revenue by approximately 4%.

Segment operating income for the Asia Pacific segment was $8.8 million and $9.2 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 5%. Foreign exchange rates decreased segment operating income by approximately 4%. Segment operating income as a percent of revenue was 21.8% in the current quarter and 23.1% in the prior year’s comparable quarter.

Corporate & Other
The Corporate & Other operating expense was $14.7 million and $12.5 million for the three months ended March 31, 2024 and 2023, respectively. The higher operating expense was primarily a result of Portfolio Optimization Plan costs totaling $2.8 million negatively impacting the three months ended March 31, 2024. See the Portfolio Optimization Plan section above for further information.

LIQUIDITY AND FINANCIAL CONDITION

Financial Condition
The Company’s financial position remains strong. The Company is in compliance with its loan covenants calculated in accordance with applicable agreements as of March 31, 2024. The Company expects its cash flow from operations and its existing debt capacity can be used to meet anticipated future cash requirements for operations, capital expenditures, and dividend payments, as well as potential acquisitions and stock repurchases. The Company’s contractual obligations consist primarily of operational commitments, which we expect to continue to be able to satisfy through cash generated from operations and debt. The Company has various series of notes outstanding that mature from 2024 through 2029. The Company believes that it has the ability to refinance or repay these obligations through a combination of cash flow from operations, issuance of additional notes, and sufficient borrowing capacity under the Company’s revolving credit facility, which matures in 2026.

As a result of our ability to manage the impact of inflation through pricing and other actions, the impact of inflation was not material to the Company’s financial position and its results of operations for the three months ended March 31, 2024. The Company has experienced increased costs for certain inputs, such as raw materials, shipping and logistics, and labor-related costs. We continue to expect to manage these impacts in the near term, but persistent, accelerated, or expanded inflationary conditions could exacerbate these challenges and impact our profitability.

Cash Flows from Operating Activities
Net cash provided by operating activities was $15.1 million and net cash used in operating activities was $3.0 million for the three months ended March 31, 2024 and 2023, respectively. The increase in net cash provided by operating activities was primarily due to a decrease in the cash used for performance-based compensation payments made during 2024 compared to 2023 and an increase in cash provided by inventory during 2024 compared to 2023, partially offset by a decrease in cash provided by accounts receivable.

Cash Flows from Investing Activities
Net cash used in investing activities was $10.9 million and $22.9 million during the three months ended March 31, 2024 and 2023, respectively. Capital expenditures were $11.0 million and $22.3 million during the three months ended March 31, 2024 and 2023, respectively.

Cash Flows from Financing Activities
Net cash used in financing activities was $9.1 million and net cash provided by financing activities was $24.6 million for the three months ended March 31, 2024 and 2023, respectively. Net debt increased by $11.0 million and $49.5 million for the three months ended March 31, 2024 and 2023, respectively. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of $17.3 million were paid during each of the three months ended March 31, 2024 and 2023. Dividends paid per share were $0.41 for both the three months ended March 31, 2024 and 2023.

15
CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s critical accounting policies during the quarter ended March 31, 2024. For additional information about the Company’s critical accounting policies, refer to “Critical Accounting Policies” under Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk during the quarter ended March 31, 2024. For additional information about market risk, refer to Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 4.
CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: The Company carried out an evaluation, under the supervision and with the participation of management, including the Company’s Chairman, President, and Chief Executive Officer and its Senior Vice President and Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of the disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, the Company’s Chairman, President, and Chief Executive Officer and its Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting: There have been no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.   OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

See Part I, Item 1, Note 11, Commitments and Contingencies, of this report for information regarding legal proceedings in which the Company is involved.

ITEM 1A. 
RISK FACTORS

There were no material changes to the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On October 19, 2017, the Board of Directors authorized the repurchase of up to three million shares (2017 Authorization). As of March 31, 2024, 1,267,019 shares had been repurchased under the 2017 Authorization. There is no expiration date for the 2017 Authorization. The 2017 Authorization may be modified, suspended, or discontinued by the Board of Directors at any time. As of March 31, 2024, the maximum number of shares that may be purchased under publicly announced plans is 1,732,981. No shares were purchased by the Company during the three months ended March 31, 2024.

ITEM 5.
OTHER INFORMATION

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6.
EXHIBITS

The exhibits listed in the following Exhibit Index are filed as part of this Quarterly Report on Form 10-Q.

16
 SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2024

Exhibit
Description
Incorporated by Reference From
Filed Herewith
       
Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
 
X
       
Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to 18 United States Code § 1350
 
X
       
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
 
X
       
101.SCH
Inline XBRL Taxonomy Extension Schema Document
 
X
       
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
 
 
X
       
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
 
X
       
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
 
 
X
       
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
 
 
X
       
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
 
X

17
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 thereunto duly authorized.

   
SENSIENT TECHNOLOGIES CORPORATION
 
         
Date:
May 7, 2024
By:
 /s/  John J. Manning
 
     
John J.Manning, Senior Vice
 
       President, General Counsel &  
     
Secretary
 
         
Date:
May 7, 2024
By:
/s/  Stephen J. Rolfs
 
     
Stephen J. Rolfs, Senior Vice
 
     
President & Chief Financial Officer
 


18

EX-31 2 ef20026304_ex31.htm EXHIBIT 31

EXHIBIT 31

CERTIFICATION
Pursuant to Rule 13a-14(a) of the Exchange Act

I, Paul Manning, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and


b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     May 7, 2024
 
   
/s/ Paul Manning
 
Paul Manning, Chairman, President &
 
Chief Executive Officer
 


EXHIBIT 31

CERTIFICATION
Pursuant to Rule 13a-14(a) of the Exchange Act

I, Stephen J. Rolfs, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and


b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     May 7, 2024
 
   
/s/ Stephen J. Rolfs
 
Stephen J.Rolfs, Senior Vice President &
 
Chief Financial Officer
 



EX-32 3 ef20026304_ex32.htm EXHIBIT 32

EXHIBIT 32

CERTIFICATION
Pursuant to 18 United States Code § 1350

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, of Sensient Technologies Corporation (the “Company”) filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Paul Manning  
 
Name:  
 Paul Manning  
 
Title:
Chairman, President & Chief Executive Officer
 
 
Date:
May 7, 2024
 

A signed original of this written statement required by Section 906 has been provided to Sensient Technologies Corporation and will be retained by Sensient Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.


EXHIBIT 32

CERTIFICATION
Pursuant to 18 United States Code § 1350

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, of Sensient Technologies Corporation (the “Company”) filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Stephen J. Rolfs  
 
Name:  
Stephen J. Rolfs  
 
Title:
Senior Vice President & Chief Financial Officer
 
 
Date:
May 7, 2024
 

A signed original of this written statement required by Section 906 has been provided to Sensient Technologies Corporation and will be retained by Sensient Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.