Sensient Technologies Reports Results for 4Q, Year Ended Dec. 31, 2015

Sensient Technologies reported earnings per share (EPS) from continuing operations of 43 cents in the fourth quarter of 2015 compared to 55 cents in last year’s fourth quarter. Revenue was $339.2 million in this year’s fourth quarter compared to $342.8 million in the comparable period last year. Operating income was $31.6 million in the fourth quarter of 2015 compared to $36.2 million in last year’s fourth quarter.

Foreign currency translation had a significant impact on the fourth quarter results, reducing reported revenue by 6.3%, operating income by 3.7%, and earnings per share by 3.6%.

For the year ended Dec. 31, 2015, reported earnings per share from continuing operations were $2.32 compared to $1.67 per share in last year’s comparable period. Revenue was approximately $1.4 billion in both 2015 and 2014. Operating income from continuing operations was $166.3 million and $130.7 million in the years ended Dec. 31, 2015 and 2014, respectively. Foreign currency translation reduced revenue by 7.4% and operating income by 1.5% in 2015.

Sensient’s adjusted earnings per share from continuing operations were 71 cents in the fourth quarters of both 2015 and 2014. Adjusted operating income was $46.7 million and $48.0 million in the fourth quarters of 2015 and 2014, respectively. Foreign currency translation reduced adjusted operating income by 5.5% and adjusted earnings per share by 5.6%.

For the year ended Dec. 31, 2015, adjusted earnings per share from continuing operations were $3.05 compared to $3.02 in the year ended Dec. 31, 2014. Adjusted operating income was $210.0 million and $221.2 million for the years ended Dec. 31, 2015 and 2014, respectively. Foreign currency translation reduced adjusted operating income by 6.7% and adjusted earnings per share by 7.3% in 2015.

Cash provided by operating activities was $128.0 million in 2015 and $189.2 million in 2014. The company repurchased approximately 200,000 shares of its common stock in the fourth quarter and approximately 2.7 million shares in 2015. Including dividend payments, the company returned approximately $225 million to shareholders in 2015.

“It was a very good year for Sensient,” said Paul Manning, president and CEO of Sensient Technologies. “The Flavors and Fragrances Group performed very well and delivered high-single digit profit growth in the fourth quarter. Most of the Color Group’s businesses also delivered solid growth in the fourth quarter. We are on schedule to complete our restructuring activities by the end of this year, and we expect the Inks business to make a significant recovery in 2016. It was a successful year for Sensient and our shareholders, and I am very optimistic about the future.”

The Flavors & Fragrances Group reported fourth quarter revenue of $201.0 million, a decrease of 1% from $203.1 million reported in last year’s fourth quarter. Operating income increased 6.3% to $27.5 million compared to $25.9 million in the fourth quarter of 2014. The Flavors & Fragrances Group’s operating margin increased 100 basis points to 13.7% in the quarter, as most of the Group’s business units reported solid local currency operating income growth in the quarter. Foreign currency translation reduced revenue by 5.2% and operating income by 1.5% in the quarter.

The Flavors & Fragrances Group reported revenue of $819.0 million for the year ended Dec. 31, 2015, a decrease of 3.8% from $851.5 million reported in 2014. Operating income increased approximately 1%, to $121.9 million in 2015, from $120.9 million in 2014. The Flavors & Fragrances Group operating margin improved to 14.9% in 2015, increasing from 14.2% in 2014. Foreign currency translation reduced both revenue and operating income in the year to date period, by 6.7% and 2.9%, respectively.

The Color Group reported revenue of $114.6 million in the quarter, a decrease of approximately 1% compared to $116.0 million in last year’s fourth quarter. Operating income decreased 15.1% to $21.0 million in the fourth quarter compared to $24.7 million in the comparable period last year. Foreign currency continued to have a significant impact, reducing revenue by 7.8%, and operating income by 7.0% in the quarter. Most of the Color Group’s businesses performed well in the quarter. In local currency, the food colors, cosmetic colors and pharmaceutical businesses reported solid revenue and operating income growth. Favorable results from the food, cosmetic and pharmaceutical businesses were more than offset by the decline in the specialty inks business.

For the full year, Color Group revenue was $470.9 million, off 7.5% compared to $509.3 million in 2014. Operating income was $94.8 million in 2015, a decrease of 16.9% compared to $114.0 million in 2014. Foreign currency translation has had a significant impact on both revenue and operating income, reducing both by approximately 9% for the year.

The Asia Pacific Group reported revenue of $33.6 million and $32.9 million in the fourth quarters of 2015 and 2014, respectively, an increase of approximately 2%. Operating income was $6.9 million in the quarter, which is a decrease of 2.7% from last year’s fourth quarter result of $7.1 million. Foreign currency translation reduced both revenue and operating income by approximately 8% in this year’s fourth quarter. For the full year, the Asia Pacific Group reported revenue of $130.6 million in 2015 and $133.3 million last year. Operating income was $25.5 million in 2015 and $25.1 million in 2014. Foreign currency translation reduced revenue by 6.4% and operating income by 5.1% for the year.

The Corporate & Other segment, which includes the restructuring and other costs, reported operating costs of $23.8 million in this year’s fourth quarter and $21.4 million in the fourth quarter of 2014. For the full year, the Corporate & Other segment had operating costs of $75.8 million compared to $129.4 million in 2014.