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Dick Hobbs
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Record Sales Drive 12.5% Increase in Second Quarter EPS
Total Debt Reduced $30.5 Million on Record Cash Flow
MILWAUKEE–(BUSINESS WIRE)–Sensient Technologies Corporation (NYSE: SXT) reported record quarterly revenue of $304.3 million for its second quarter ended June 30, 2007, up 7.8% from the comparable quarter in 2006. Second quarter diluted earnings per share rose 12.5% to 45 cents from 40 cents in last year’s second quarter. Results for the 2006 second quarter included a gain of approximately one cent per share from the sale of a non-core investment.
Revenue for the first six months of this year was $589.6 million, an 8.2% increase from the prior year’s comparable period. Diluted earnings per share for the six months ended June 30, 2007, were up 10.8% to 82 cents compared to 74 cents in last year’s first half.
Cash provided by operating activities rose sharply in the quarter, to a record level of $43.7 million. Total debt was reduced by $30.5 million in the quarter as a result of the strong cash flow.
“We reported record revenue and operating income in our second quarter,” said Kenneth P. Manning, Chairman, President and CEO of Sensient Technologies Corporation. “The Company has achieved six consecutive quarters of earnings growth and we expect this strong performance to continue into 2008.”
BUSINESS REVIEW
The Flavors & Fragrances Group reported record quarterly revenue and operating income. Second quarter 2007 revenue increased 7.7% to $202.9 million. Operating income was up 15.0% to $31.2 million compared to the second quarter of 2006. Year-to-date revenue increased 7.9% to $387.2 million and operating income was up 14.7% to $57.4 million. Group revenue in the quarter benefited from higher volumes and improved pricing. Foreign currency translation increased quarterly revenue by approximately 2.7%. Solid volume growth was experienced in all major markets, including the United States, Latin America, Europe and China. Quarterly profit rose as a result of the higher sales, favorable product mix and continued improvements in the profitability of the Group’s European operations.
The Color Group’s revenue increased 5.6% to $95.6 million for the quarter ended June 30, 2007, compared to $90.5 million in last year’s second quarter. Operating income for the quarter was $17.2 million, up 8.5% from $15.8 million reported in the second quarter of 2006. Year-to-date revenue increased 6.6% to $191.6 million and operating income was up 8.6% to $34.4 million. Quarterly revenue for the Color Group reflected solid growth within the food and beverage and cosmetic product lines. Foreign currency translation increased quarterly revenue by approximately 3.5%. Higher sales and improved product mix contributed to the increase in Color Group profits for the second quarter.
2007 OUTLOOK
Sensient has increased its reported 2007 diluted earnings per share guidance to between $1.56 and $1.59. The previous range was between $1.54 and $1.56.
CONFERENCE CALL
The company will host a conference call to discuss its 2007 second quarter financial results at 9:00 a.m. CDT on Monday, July 16, 2007. To make a reservation for the conference call, please contact InterCall Teleconferencing at (706) 645-6973 and refer to the Sensient Technologies Corporation conference call.
A replay will be available beginning at 1:00 p.m. CDT on July 16, 2007, through midnight on July 23, 2007, by calling (706) 645-9291 and referring to passcode 6348136. A transcript of the call will also be posted on the company’s web site at www.sensient-tech.com after the call concludes.
