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

Double-Digit Growth in Reported and Adjusted Revenue

Sensient Operating at or Above its 2022 Guidance

Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $371.7 million in this year’s second quarter compared to $335.8 million in last year’s second quarter. Reported operating income in the second quarter of 2022 was $55.2 million compared to $35.8 million in the second quarter of 2021. Reported diluted earnings per share was 92 cents in the second quarter of 2022 compared to 61 cents in the second quarter of 2021. Foreign currency translation decreased revenue by approximately 3% and earnings per share by approximately 5% in the present quarter.

The 2021 second quarter reported results included divestiture & other related costs and operational improvement plan costs, which in total decreased 2021 second quarter diluted earnings per share by $0.16. The 2021 second quarter reported results also included the operations of the divested product lines, which decreased diluted earnings per share by $0.01. We did not make any adjustments to our 2022 second quarter reported results for divestiture & other related costs, operational improvement plan costs, or results of the divested product lines. The adjustments to our reported results are described in more detail under “Reconciliation of Non-GAAP Amounts” at the end of this release.

BUSINESS REVIEW

   
Reported
Revenue

Quarter

 

Year-to-Date

Flavors & Extracts

5.5%

 

-2.2%

Color

17.3%

 

13.3%

Asia Pacific

15.5%

 

11.5%

Total Revenue

10.7%

 

4.6%

 

 

 

 

Adjusted

Local Currency (1)

Revenue

Quarter

 

Year-to-Date

Flavors & Extracts

8.8%

 

7.0%

Color

21.9%

 

16.8%

Asia Pacific

23.0%

 

18.6%

Total Revenue

14.9%

 

11.6%

   
(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 second quarter revenue of $189.3 million compared to $179.4 million in last year’s second quarter, an increase of 5.5%. Adjusted local currency revenue increased 8.8% in the quarter. The Group had favorable pricing and volume growth in Flavors, Extracts & Flavor Ingredients, and favorable pricing in Natural Ingredients, partially offset by lower volumes in Natural Ingredients. The lower volumes in Natural Ingredients were primarily a result of a limited supply of onion combined with strong 2021 demand. Segment operating income was $30.0 million in the current quarter compared to $24.5 million reported in the comparable period last year, an increase of 22.3%. Adjusted local currency operating income increased 23.9% in the quarter. The higher operating income was primarily due to the favorable pricing and volume growth in Flavors, Extracts & Flavor Ingredients, and favorable pricing in Natural Ingredients, 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 second quarter of 2022 rose to 15.9%.

The Color Group reported revenue of $156.3 million in the quarter compared to $133.2 million in last year’s second quarter, an increase of 17.3%. Adjusted local currency revenue increased 21.9% in the quarter. The Group had strong volume growth and higher pricing in both Food & Pharmaceutical Colors and Personal Care. Segment operating income was $31.2 million in the quarter compared to $25.6 million in last year’s comparable period, an increase of 21.7%. Adjusted local currency operating income increased 23.9% compared to the prior year’s second 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 4% and segment operating income by approximately 5% in the quarter. Segment operating income as a percent of revenue in the second quarter of 2022 was 20.0%.

The Asia Pacific Group reported revenue of $37.3 million in the quarter compared to $32.3 million in last year’s second quarter, an increase of 15.5%. Adjusted local currency revenue increased 23.0% in the quarter. The higher revenue was a result of strong volume growth and higher pricing. Segment operating income was $7.7 million in the quarter compared to $5.8 million in last year’s second quarter, an increase of 33.3%. Adjusted local currency operating income increased 43.3% 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 8% and 10%, respectively, in the quarter. Segment operating income as a percent of revenue in the second quarter of 2022 rose to 20.7%.

Corporate & Other reported operating costs of $13.7 million in the current quarter compared to $20.2 million in last year’s second quarter, a decrease of 32.3%. Adjusted local currency operating expenses for Corporate & Other increased 14.0% in the quarter primarily due to higher performance-based compensation.

2022 OUTLOOK

Sensient is reconfirming its expectation for 2022 full year GAAP diluted earnings per share to grow at a high-teen growth rate compared to the Company’s 2021 reported GAAP diluted earnings per share of $2.81. Our full year 2022 guidance does not include any material divestiture & other related costs, operational improvement plan costs, or results of divested businesses.

The Company now expects 2022 revenue to grow at a high single digit rate in local currency compared to the Company’s 2021 adjusted revenue(2). The Company’s previous 2022 revenue guidance was for a mid-to-high single digit growth rate in local currency. The Company is reconfirming its expectation for 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 now expects full year 2022 earnings per share reported on a U.S. dollar basis to be impacted by approximately twenty-three cents of foreign currency headwinds based on current exchange rates. The Company’s previous guidance anticipated twelve cents of foreign currency headwinds.

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 ongoing COVID-19 pandemic and the conflict between Russia and Ukraine on our business.

(2) See “Reconciliation of Non-GAAP Amounts” at the end of this release for more information.

USE OF NON-GAAP FINANCIAL MEASURES

The Company’s non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include; currency movements, depreciation and amortization, non-cash share-based compensation, divestiture & other related costs, operational improvement plan costs and income, and the results of the divested operations. These measures are provided to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release.

CONFERENCE CALL

The Company will host a conference call to discuss its 2022 second quarter financial results at 8:30 a.m. CDT on Friday, July 22, 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 July 29, 2022, by calling (877) 344-7529 and referring to conference identification number 5230009. 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 July 26, 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 ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers, and suppliers, the availability and cost of raw materials, energy, and other supplies, the availability and cost of labor, logistics, and transportation; 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; governmental regulations and restrictions, and general economic conditions, including inflation; the pace and nature of new product introductions by the Company and the Company’s customers; the Company’s ability to anticipate and respond to changing consumer preferences and changing technologies; the Company’s ability to successfully implement its growth strategies; the outcome of the Company’s various productivity-improvement and cost-reduction efforts, acquisition and divestiture activities, and operational improvement plan; changes in costs of raw materials, including energy; industry, regulatory, legal, and economic factors related to the Company’s domestic and international business; the effects of tariffs, trade barriers, and disputes; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; currency exchange rate fluctuations; and other factors included in “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as updated and supplemented by the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and in other documents that the Company files with the SEC. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations. This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Except to the extent required by applicable laws, the Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.

ABOUT SENSIENT TECHNOLOGIES

Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, cosmetic, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.

www.sensient.com

Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)
   
Consolidated Statements of Earnings Three Months Ended June 30, Six Months Ended June 30,
   

2022

2021

% Change

2022

2021

 

% Change

 

 

Revenue

$

371,706

 

$

335,827

 

10.7%

$

727,227

 

$

695,529

 

4.6%

 

 

 

Cost of products sold

 

240,703

 

 

224,233

 

7.3%

 

471,378

 

 

468,322

 

0.7%

Selling and administrative expenses

 

75,759

 

 

75,841

 

(0.1%)

 

147,816

 

 

144,557

 

2.3%

 

 

 

Operating income

 

55,244

 

 

35,753

 

54.5%

 

108,033

 

 

82,650

 

30.7%

Interest expense

 

3,083

 

 

3,322

 

 

 

6,076

 

 

6,755

 

 

 

 

 

Earnings before income taxes

 

52,161

 

 

32,431

 

 

 

101,957

 

 

75,895

 

 

Income taxes

 

13,514

 

 

6,495

 

 

 

26,239

 

 

18,291

 

 

 

 

 

Net earnings

$

38,647

 

$

25,936

 

49.0%

$

75,718

 

$

57,604

 

31.4%

 

 

 

Earnings per share of common stock:

 

 

Basic

$

0.92

 

$

0.62

 

 

$

1.81

 

$

1.37

 

 

 

 

 

Diluted

$

0.92

 

$

0.61

 

 

$

1.80

 

$

1.36

 

 

 

 

 

Average common shares outstanding:

 

 

Basic

 

41,893

 

 

42,135

 

 

 

41,879

 

 

42,199

 

 

 

 

 

Diluted

 

42,208

 

 

42,267

 

 

 

42,178

 

 

42,328

 

 

 

 

 

 

 

 

 

 

 

Results by Segment Three Months Ended June 30, Six Months Ended June 30,
 

 

 

Revenue

2022

2021

% Change

2022

2021

% Change
 

 

 

Flavors & Extracts

$

189,337

 

$

179,401

 

5.5%

$

372,064

 

$

380,312

 

(2.2%)

Color

 

156,268

 

 

133,207

 

17.3%

 

304,706

 

 

268,927

 

13.3%

Asia Pacific

 

37,328

 

 

32,317

 

15.5%

 

73,793

 

 

66,157

 

11.5%

Intersegment elimination

 

(11,227

)

 

(9,098

)

 

 

(23,336

)

 

(19,867

)

 

 

 

 

Consolidated

$

371,706

 

$

335,827

 

10.7%

$

727,227

 

$

695,529

 

4.6%

 

 

 

 

 

 

Operating Income

 

 

 

 

 

Flavors & Extracts

$

30,013

 

$

24,536

 

22.3%

$

57,592

 

$

51,554

 

11.7%

Color

 

31,178

 

 

25,615

 

21.7%

 

61,835

 

 

52,209

 

18.4%

Asia Pacific

 

7,721

 

 

5,793

 

33.3%

 

15,925

 

 

12,545

 

26.9%

Corporate & Other

 

(13,668

)

 

(20,191

)

 

 

(27,319

)

 

(33,658

)

 

 

 

 

Consolidated

$

55,244

 

$

35,753

 

54.5%

$

108,033

 

$

82,650

 

30.7%

Sensient Technologies Corporation
(In thousands)
(Unaudited)
   
Consolidated Condensed Balance Sheets

June 30,

December 31,

2022

2021

   
Cash and cash equivalents

$

25,271

 

$

25,740

 

Trade accounts receivable

 

295,948

 

 

261,121

 

Inventories

 

452,161

 

 

411,635

 

Prepaid expenses and other current assets

 

48,146

 

 

42,657

 

Total Current Assets

 

821,526

 

 

741,153

 

   
Goodwill & intangible assets (net)

 

417,538

 

 

435,009

 

Property, plant, and equipment (net)

 

443,675

 

 

446,478

 

Other assets

 

120,483

 

 

122,853

 

   
Total Assets

$

1,803,222

 

$

1,745,493

 

   
Trade accounts payable

$

140,776

 

$

125,519

 

Short-term borrowings

 

26,624

 

 

8,539

 

Other current liabilities

 

96,516

 

 

98,247

 

Total Current Liabilities

 

263,916

 

 

232,305

 

   
Long-term debt

 

498,715

 

 

503,006

 

Accrued employee and retiree benefits

 

28,193

 

 

28,579

 

Other liabilities

 

53,431

 

 

43,178

 

Shareholders' Equity

 

958,967

 

 

938,425

 

   
Total Liabilities and Shareholders' Equity

$

1,803,222

$

1,745,493

Sensient Technologies Corporation
(In thousands, except per share amounts)
(Unaudited)
   
Consolidated Statements of Cash Flows
Six Months Ended June 30,
 

2022

2021

Cash flows from operating activities:
Net earnings

$

75,718

 

$

57,604

 

Adjustments to arrive at net cash provided by operating activities:
Depreciation and amortization

 

26,180

 

 

25,817

 

Share-based compensation expense

 

8,691

 

 

4,188

 

Net (gain) loss on assets

 

(38

)

 

206

 

Loss on divestitures and other charges

 

-

 

 

13,511

 

Deferred income taxes

 

12,244

 

 

1,702

 

Changes in operating assets and liabilities:
Trade accounts receivable

 

(41,592

)

 

(26,902

)

Inventories

 

(51,768

)

 

19,357

 

Prepaid expenses and other assets

 

(25,919

)

 

(15,573

)

Trade accounts payable and other accrued expenses

 

20,501

 

 

9,632

 

Accrued salaries, wages, and withholdings

 

(4,188

)

 

(3,944

)

Income taxes

 

2,765

 

 

1,953

 

Other liabilities

 

199

 

 

1,710

 

   
Net cash provided by operating activities

 

22,793

 

 

89,261

 

   
Cash flows from investing activities:
Acquisition of property, plant, and equipment

 

(32,468

)

 

(25,550

)

Proceeds from sale of assets

 

92

 

 

169

 

Proceeds from divestiture of businesses

 

-

 

 

36,255

 

Other investing activities

 

1,571

 

 

(254

)

   
Net cash (used in) provided by investing activities

 

(30,805

)

 

10,620

 

   
Cash flows from financing activities:
Proceeds from additional borrowings

 

69,424

 

 

25,997

 

Debt payments

 

(31,547

)

 

(62,578

)

Purchase of treasury stock

 

-

 

 

(22,507

)

Dividends paid

 

(34,446

)

 

(33,027

)

Other financing activities

 

(2,056

)

 

(582

)

   
Net cash provided by (used in) financing activities

 

1,375

 

 

(92,697

)

   
Effect of exchange rate changes on cash and cash equivalents

 

6,168

 

 

1,352

 

   
Net (decrease) increase in cash and cash equivalents

 

(469

)

 

8,536

 

Cash and cash equivalents at beginning of period

 

25,740

 

 

24,770

 

Cash and cash equivalents at end of period

$

25,271

 

$

33,306

 

   
   
Supplemental Information
Six Months Ended June 30,

2022

2021

   
Dividends paid per share

$

0.82

 

$

0.78

 

Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)
   
Reconciliation of Non-GAAP Amounts
   
The Company's results for the three and six months ended June 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 June 30,

 

Six Months Ended June 30,

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Revenue (GAAP)

$

371,706

 

$

335,827

 

10.7%

$

727,227

 

$

695,529

 

4.6%

Revenue of the divested product lines

 

-

 

 

(2,207

)

 

 

-

 

 

(27,777

)

Adjusted revenue

$

371,706

 

$

333,620

 

11.4%

$

727,227

 

$

667,752

 

8.9%

 

 

 
Operating income (GAAP)

$

55,244

 

$

35,753

 

54.5%

$

108,033

 

$

82,650

 

30.7%

Divestiture & other related costs – Cost of products sold

 

-

 

 

3

 

 

 

-

 

 

28

 

Divestiture & other related costs – Selling and administrative expenses

 

-

 

 

11,685

 

 

 

-

 

 

13,232

 

Operating loss (income) of the divested product lines

 

-

 

 

459

 

 

 

-

 

 

(2,468

)

Operational improvement plan - Selling and administrative expenses

 

-

 

 

(3,494

)

 

 

-

 

 

(2,493

)

Adjusted operating income

$

55,244

 

$

44,406

 

24.4%

$

108,033

 

$

90,949

 

18.8%

 

 

 
Net earnings (GAAP)

$

38,647

 

$

25,936

 

49.0%

$

75,718

 

$

57,604

 

31.4%

Divestiture & other related costs, before tax

 

-

 

 

11,688

 

 

 

-

 

 

13,260

 

Tax impact of divestiture & other related costs

 

-

 

 

(1,689

)

 

 

-

 

 

(896

)

Net loss (earnings) of the divested product lines, before tax

 

-

 

 

459

 

 

 

-

 

 

(2,468

)

Tax impact of the divested product lines

 

-

 

 

(115

)

 

 

-

 

 

608

 

Operational improvement plan income, before tax

 

-

 

 

(3,494

)

 

 

-

 

 

(2,493

)

Tax impact of operational improvement plan

 

-

 

 

455

 

 

 

-

 

 

159

 

Adjusted net earnings

$

38,647

 

$

33,240

 

16.3%

$

75,718

 

$

65,774

 

15.1%

 

 

 
Diluted earnings per share (GAAP)

$

0.92

 

$

0.61

 

50.8%

$

1.80

 

$

1.36

 

32.4%

Divestiture & other related costs, net of tax

 

-

 

 

0.24

 

 

 

-

 

 

0.29

 

Results of operations of the divested product lines, net of tax

 

-

 

 

0.01

 

 

 

-

 

 

(0.04

)

Operational improvement plan income, net of tax

 

-

 

 

(0.07

)

 

 

-

 

 

(0.06

)

Adjusted diluted earnings per share

$

0.92

$

0.79

 

16.5%

$

1.80

$

1.55

 

16.1%

   
Note: Earnings per share calculations may not foot due to rounding differences.
Sensient Technologies Corporation
(In thousands)
(Unaudited)
   
Reconciliation of Non-GAAP Amounts - Continued
   
Results by Segment

Three Months Ended June 30,

Revenue

2022

 

Adjustments (1)

 

Adjusted

2022

 

2021

 

Adjustments (1)

 

Adjusted

2021

   
Flavors & Extracts

$

189,337

 

$

-

 

$

189,337

 

$

179,401

 

$

(1,415

)

$

177,986

 

Color

 

156,268

 

 

-

 

 

156,268

 

 

133,207

 

 

(792

)

 

132,415

 

Asia Pacific

 

37,328

 

 

-

 

 

37,328

 

 

32,317

 

 

-

 

 

32,317

 

Intersegment elimination

 

(11,227

)

 

-

 

 

(11,227

)

 

(9,098

)

 

-

 

 

(9,098

)

   
Consolidated

$

371,706

 

$

-

 

$

371,706

 

$

335,827

 

$

(2,207

)

$

333,620

 

   
   
Operating Income
   
Flavors & Extracts

$

30,013

 

$

-

 

$

30,013

 

$

24,536

 

$

(45

)

$

24,491

 

Color

 

31,178

 

 

-

 

 

31,178

 

 

25,615

 

 

504

 

 

26,119

 

Asia Pacific

 

7,721

 

 

-

 

 

7,721

 

 

5,793

 

 

-

 

 

5,793

 

Corporate & Other

 

(13,668

)

 

-

 

 

(13,668

)

 

(20,191

)

 

8,194

 

 

(11,997

)

   
Consolidated

$

55,244

 

$

-

 

$

55,244

 

$

35,753

 

$

8,653

 

$

44,406

 

   
Results by Segment

Six Months Ended June 30,

Revenue

2022

 

Adjustments (1)

 

Adjusted

2022

 

2021

 

Adjustments (1)

 

Adjusted

2021

   
Flavors & Extracts

$

372,064

 

$

-

 

$

372,064

 

$

380,312

 

$

(26,304

)

$

354,008

 

Color

 

304,706

 

 

-

 

 

304,706

 

 

268,927

 

 

(1,328

)

 

267,599

 

Asia Pacific

 

73,793

 

 

-

 

 

73,793

 

 

66,157

 

 

(295

)

 

65,862

 

Intersegment elimination

 

(23,336

)

 

-

 

 

(23,336

)

 

(19,867

)

 

150

 

 

(19,717

)

   
Consolidated

$

727,227

 

$

-

 

$

727,227

 

$

695,529

 

$

(27,777

)

$

667,752

 

   
   
Operating Income
   
Flavors & Extracts

$

57,592

 

$

-

 

$

57,592

 

$

51,554

 

$

(2,925

)

$

48,629

 

Color

 

61,835

 

 

-

 

 

61,835

 

 

52,209

 

 

544

 

 

52,753

 

Asia Pacific

 

15,925

 

 

-

 

 

15,925

 

 

12,545

 

 

(87

)

 

12,458

 

Corporate & Other

 

(27,319

)

 

-

 

 

(27,319

)

 

(33,658

)

 

10,767

 

 

(22,891

)

   
Consolidated

$

108,033

 

$

-

$

108,033

 

$

82,650

 

$

8,299

 

$

90,949

 

(1) 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.
Sensient Technologies Corporation
(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 June 30,
Revenue Total Foreign

Exchange

Rates
Adjustments (2) Adjusted

Local

Currency
Flavors & Extracts

5.5%

 

(2.5%)

 

(0.8%)

 

8.8%

Color

17.3%

 

(3.9%)

 

(0.7%)

 

21.9%

Asia Pacific

15.5%

 

(7.5%)

 

0.0%

 

23.0%

Total Revenue

10.7%

 

(3.4%)

 

(0.8%)

 

14.9%

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

Flavors & Extracts

22.3%

 

(1.3%)

 

(0.3%)

 

23.9%

Color

21.7%

 

(4.6%)

 

2.4%

 

23.9%

Asia Pacific

33.3%

 

(10.0%)

 

0.0%

 

43.3%

Corporate & Other

(32.3%)

 

0.0%

 

(46.3%)

 

14.0%

Total Operating Income

54.5%

 

(5.8%)

 

31.2%

 

29.1%

Diluted Earnings Per Share

50.8%

 

(4.9%)

 

34.2%

 

21.5%

Adjusted EBITDA

22.6%

 

(4.1%)

 

N/A

 

26.7%

   
Six Months Ended June 30,
Revenue Total Foreign

Exchange

Rates
Adjustments (2) Adjusted

Local

Currency
Flavors & Extracts

(2.2%)

 

(2.1%)

 

(7.1%)

 

7.0%

Color

13.3%

 

(2.9%)

 

(0.6%)

 

16.8%

Asia Pacific

11.5%

 

(6.6%)

 

(0.5%)

 

18.6%

Total Revenue

4.6%

 

(2.8%)

 

(4.2%)

 

11.6%

 

 

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

 

Flavors & Extracts

11.7%

 

(1.2%)

 

(6.4%)

 

19.3%

Color

18.4%

 

(3.6%)

 

1.3%

 

20.7%

Asia Pacific

26.9%

 

(8.9%)

 

(0.9%)

 

36.7%

Corporate & Other

(18.8%)

 

0.0%

 

(38.2%)

 

19.4%

Total Operating Income

30.7%

 

(4.3%)

 

12.5%

 

22.5%

Diluted Earnings Per Share

32.4%

 

(4.4%)

 

17.4%

 

19.4%

Adjusted EBITDA

18.2%

 

(3.2%)

 

N/A

 

21.4%

(2) 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 six months ended June 30, 2022 and 2021.

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Operating income (GAAP)

$

55,244

 

$

35,753

 

54.5%

$

108,033

 

$

82,650

 

30.7%

Depreciation and amortization

 

13,124

 

 

13,018

 

 

26,180

 

 

25,817

 

Depreciation and amortization, divested product lines

 

-

 

 

(48

)

 

-

 

 

(97

)

Share-based compensation expense

 

4,528

 

 

2,075

 

 

8,691

 

 

4,188

 

Divestiture & other related costs, before tax

 

-

 

 

11,688

 

 

-

 

 

13,260

 

Results of operations of the divested product lines, before tax

 

-

 

 

459

 

 

-

 

 

(2,468

)

Operational improvement plan costs (income), before tax

 

-

 

 

(3,494

)

 

-

 

 

(2,493

)

Adjusted EBITDA

$

72,896

$

59,451

 

22.6%

$

142,904

$

120,857

 

18.2%

The following table summarizes the reconciliation between Net cash provided by operating activities (GAAP) and Free Cash Flow for the three and six months ended June 30, 2022 and 2021.
Three Months Ended June 30, Six Months Ended June 30,
   

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Net cash provided by operating activities (GAAP)

$

23,685

 

$

60,297

 

(60.7

%)

$

22,793

 

$

89,261

 

(74.5

%)

Capital expenditures

 

(19,732

)

 

(11,306

)

 

(32,468

)

 

(25,550

)

Free Cash Flow

$

3,953

 

$

48,991

 

(91.9

%)

$

(9,675

)

$

63,711

 

(115.2

%)

We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation. Rather, they should be considered together with GAAP measures and the rest of the information included in this release and our SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period-to-period basis and to gain additional insight into underlying operating and performance trends, and we believe the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies.

Category: Earnings

Contacts

Amy Agallar

(414) 347-3706

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