Sensient Technologies Corporation (NYSE:SXT) Q1 2025 Earnings Conference Call April 25, 2025 9:30 AM ET Company Participants Tobin Tornehl - Vice President and Chief Financial Officer Paul Manning - Chairman, President and Chief Executive Officer Conference Call Participants Ghansham Panjabi - Baird Nicola Tang - BNP Paribas David Green - Boldhaven Operator Good morning, everyone, and welcome to the Sensient Technologies Corporation 2025 First Quarter Earnings Conference Call. All participants will be in li ...

Financial Performance - Reported revenue increased 2.0% to $392.3 million in Q1 2025 compared to $384.7 million in Q1 2024, with a local currency increase of 4.1%[5] - Reported operating income rose 8.3% to $53.5 million in Q1 2025, up from $49.4 million in Q1 2024, with local currency adjusted operating income increasing by 10.3%[5] - Earnings per share increased 11.0% to $0.81 in Q1 2025 compared to $0.73 in Q1 2024, with local currency adjusted diluted EPS rising by 11.4%[5] - Net earnings for the quarter ended March 31, 2025, increased to $34,462 million, up 11.4% from $30,940 million in 2024[29] - Adjusted operating income rose to $56,394 million, reflecting an 8.0% increase compared to $52,218 million in the prior year[29] - Total revenue for the quarter increased by 2.0%, with adjusted revenue growth of 4.1%[33] - Diluted earnings per share (GAAP) increased to $0.81, an 11.0% rise from $0.73 in the previous year[29] Segment Performance - The Flavors & Extracts Group reported revenue of $193.7 million, a slight increase of 0.3% year-over-year, while the Color Group's revenue increased by 4.8% to $167.8 million[8][9] - Operating income from the Color segment increased by 10.0% to $34,852 million, while the Flavors & Extracts segment saw a 5.5% increase to $24,989 million[31] - The Asia Pacific Group's revenue grew by 4.0% to $41.9 million, with segment operating income increasing by 7.6% to $9.4 million[10] Guidance and Future Outlook - The company's guidance for 2025 includes mid-single-digit growth in local currency revenue and diluted EPS expected between $3.13 and $3.23[14] Expenses and Costs - Corporate & Other reported operating expenses of $15.8 million in Q1 2025, up from $14.7 million in Q1 2024, primarily due to higher performance-based compensation costs[12] - The company recorded $2.9 million in costs related to its Portfolio Optimization Plan in Q1 2025, slightly up from $2.8 million in the prior year[5] Assets and Liabilities - Total assets increased to $2.09 billion as of March 31, 2025, compared to $2.02 billion at the end of 2024[26] - Long-term debt rose to $683.3 million as of March 31, 2025, compared to $613.5 million at the end of 2024[26] - Net debt as of March 31, 2025, was $680,676 million, a slight increase from $649,175 million in 2024[36] Cash Flow - Cash flows from operating activities showed a net cash used of $8,978 million, a decrease from $15,134 million in 2024[27] - Net cash used in investing activities was $21,284 million, compared to $10,938 million in the prior year, indicating increased investment[27] - Credit Adjusted EBITDA for the trailing twelve months ended March 31, 2025, was $273,198 million, up from $250,229 million in 2024[36] Dividends - The company paid dividends of $0.41 per share, consistent with the previous year[27]

Core Viewpoint - China SXT Pharmaceuticals, Inc. has regained compliance with Nasdaq's Minimum Bid Price Requirement after a share consolidation, closing the matter with Nasdaq [1][4]. Group 1: Compliance Notification - The Company received a Compliance Notice from Nasdaq on March 13, 2025, confirming compliance with the Minimum Bid Price Requirement [1]. - Previously, on October 3, 2024, the Company was notified of its failure to maintain a minimum bid price of US$1.00 per share for 30 consecutive business days [2]. - The Company was given until April 1, 2025, to regain compliance under Nasdaq Listing Rules [2]. Group 2: Share Consolidation - To meet the Minimum Bid Price Requirement, the Company executed a share consolidation on February 25, 2025, consolidating every eight ordinary shares into one [3]. - Following the consolidation, the Company achieved a closing bid price of at least US$1.00 per share for 10 consecutive business days from February 25, 2025, to March 12, 2025 [4]. Group 3: Company Overview - China SXT Pharmaceuticals, Inc. was founded in 2005 and is headquartered in Taizhou City, Jiangsu Province, China [5]. - The Company specializes in the research, development, manufacturing, marketing, and sales of Traditional Chinese Medicine Pieces (TCMPs) and TCM Homologous Supplements (TCMHS) [5].

Acquisitions and Divestitures - The Company acquired Endemix, a natural colors business in Turkey, for $23.3 million, net of $1.3 million in debt assumed[17]. - The Company received $2.5 million in net cash from the sale of its yogurt fruit preparations product line in 2022[18]. - The Company acquired Endemix for $23.3 million, net of $1.3 million in debt assumed, with net assets of $9.0 million and identified intangible assets of $4.9 million[223]. Financial Performance - The Company reported revenue of $1,557,228,000 for the year ended December 31, 2024, representing an increase of 6.9% from $1,456,450,000 in 2023[173]. - Net earnings for 2024 were $124,666,000, up from $93,394,000 in 2023, reflecting a year-over-year growth of 33.5%[173]. - Operating income increased to $191,579,000 in 2024, compared to $155,023,000 in 2023, marking a growth of 23.6%[173]. - Basic earnings per share rose to $2.96 in 2024, compared to $2.22 in 2023, reflecting a significant increase of 33.5%[173]. - Total comprehensive income for 2024 decreased to $69,944,000, down 42.5% from $121,965,000 in 2023[175]. - Cash flow from operating activities for 2024 was $157,151,000, compared to $169,697,000 in 2023, reflecting a decrease of 7.5%[179]. - The Company reported net earnings of $124.7 million for the year ended December 31, 2024, compared to $93.4 million in 2023, representing a year-over-year increase of 33.5%[212]. - Basic earnings per share (EPS) increased to $2.96 in 2024 from $2.22 in 2023, while diluted EPS rose to $2.94 from $2.21, reflecting a significant improvement in profitability[212]. Assets and Liabilities - Total assets rose to $2,023,794,000 in 2024, a slight increase of 0.5% from $2,014,507,000 in 2023[177]. - Long-term debt decreased to $613,523,000 in 2024, down 4.9% from $645,085,000 in 2023[177]. - Cash and cash equivalents at the end of 2024 were $26,626,000, a decrease of 7.9% from $28,934,000 at the end of 2023[179]. - The Company had short-term borrowings totaling $19.8 million as of December 31, 2024, up from $13.5 million in 2023[243]. - The fair value of the Company's long-term debt at December 31, 2024, was estimated at $622.0 million, down from $653.7 million in 2023[283]. Operational Metrics - The Company employed 4,014 persons worldwide as of December 31, 2024, with approximately 44% based in the United States and 56% outside[42]. - The Company employed 772 people in research and development, quality assurance, agronomy, and related positions[31]. - The Company’s inventories totaled $600.3 million as of December 31, 2024, compared to $598.4 million in 2023, with finished and in-process products accounting for $426.8 million[193]. - The Company’s principal manufacturing plants are located in multiple countries, including the U.S., Brazil, China, and Turkey, enhancing its global supply chain capabilities[22][25]. Market and Industry Position - The Company believes it is one of the largest producers of synthetic and natural colors globally, with a significant market share in certified food colors[24]. - The Flavors & Extracts Group is a leading supplier of flavor systems for food, beverage, and personal care industries, serving both multinational and regional companies[19]. - The Company focuses on developing high-performance components and specialized solutions for various industries, including food, pharmaceuticals, and personal care[15]. Financial Risks and Management - The Company is exposed to market risks including interest rates, currency exchange rates, and commodity prices, with potential impacts quantified in millions[166]. - The net fair value of foreign exchange contracts was a liability of $0.8 million as of December 31, 2024, compared to an asset of $1.0 million in 2023[168]. - The Company utilizes derivative financial instruments to manage foreign currency and interest rate risks, reflecting a proactive approach to financial risk management[202]. Taxation and Deferred Tax Assets - The effective tax rate for 2024 was 23.4%, a decrease from 28.1% in 2023[266]. - Deferred tax assets decreased from $83.257 million in 2023 to $82.557 million in 2024, while net deferred tax assets increased from $27.304 million to $35.780 million[268]. - The Company recognized interest and penalties related to unrecognized tax benefits amounting to $0.5 million in 2024, up from $0.4 million in 2023[272]. Employee and Leadership Development - The Company has a strong focus on talent acquisition and development, with over half of senior leadership promoted from within[48]. - Total expense for the Company's defined contribution plans was $8.0 million in 2024, slightly down from $8.2 million in 2023[256]. Capital Expenditures and Investments - The Company’s capital expenditures for 2024 totaled $59.212 million, a decrease from $87.868 million in 2023[279]. - The Company plans to adopt ASU No. 2023-09 for income tax disclosures in the fourth quarter of 2025, which may impact its consolidated financial statements[220]. - The Company will adopt ASU No. 2024-03 for disaggregation of income statement expenses in fiscal years beginning after December 15, 2026[221].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported local currency revenue growth of 8.9%, adjusted EBITDA growth of 18.8%, and adjusted EPS growth of 29.4% [9] - For the full year 2024, local currency revenue growth was 7.4%, and adjusted EBITDA growth was 8.3% [10] - Adjusted operating income for Q4 2024 was $42.9 million, a 20.8% increase in local currency compared to the prior year [40] - Cash flow from operations was $157 million in 2024, while free cash flow increased by 19.7% to $98 million [42] Business Line Data and Key Metrics Changes - The Color Group achieved 14% local currency revenue growth and 27.4% operating profit growth in Q4 2024, with full-year revenue growth of 7.3% [14] - The Flavors and Extracts Group reported 3.4% local currency revenue growth and 18.4% operating profit growth in Q4 2024, with full-year revenue growth of 7.1% [16] - The Asia Pacific Group experienced exceptional growth, with 25.2% local currency revenue growth and 41.7% operating profit growth in Q4 2024, and 13% revenue growth for the full year [18] Market Data and Key Metrics Changes - The company noted a stabilization of end customer demand in North America and Europe, despite an overall decline in new product launches in 2024 [12] - Natural colors represent approximately 60% of the food and pharmaceutical revenue of the Color Group, with a significant shift towards natural colors in the U.S. market [30] Company Strategy and Development Direction - The company is focused on optimizing its cost structure and reducing inventory, with a portfolio optimization plan expected to save $8 million to $10 million annually [13] - The acquisition of Seoli, a French startup, aims to enhance the company's capabilities in natural color extraction, benefiting both personal care and food color product lines [26] - The company anticipates mid-single-digit local currency revenue growth for 2025, driven by strong performance in natural colors and flavors [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in natural colors, highlighting a significant market shift from synthetic to natural products [28] - The company expects to maintain healthy EBITDA margins across its groups and anticipates a leverage ratio of 2.3% at the end of 2024 [25] - Management acknowledged potential headwinds from foreign currency translation but remains confident in achieving local currency adjusted EBITDA growth [44] Other Important Information - The company plans to use excess cash for stock buybacks or debt repayment while evaluating acquisition opportunities [26] - The FDA's recent ban on Red 3 is expected to drive further conversions to natural colors, presenting a significant opportunity for the company [30] Q&A Session Summary Question: Can you provide specifics on the increase in activity and business wins for natural colors? - Management reported double-digit revenue and volume growth in the natural colors segment, with approximately 80% of new product launches globally containing natural colors [51][52] Question: What is the margin differential between natural and synthetic colors? - Management indicated that while revenue may increase with natural colors, gross margins could be slightly eroded, but operating profit margins would remain stable [63] Question: What is the current penetration rate of natural colors in the U.S.? - Management estimated that about one-third of the U.S. market has converted to natural colors, with significant growth opportunities ahead [74] Question: What is driving the strong performance in the Asia Pacific Group? - The strong performance is attributed to years of investment in the region, a robust sales force, and geographic expansion efforts [90] Question: What is the long-term EBITDA growth target? - Management confirmed that the long-term EBITDA growth target remains relevant, with expectations for mid to high single-digit growth in 2025 [96]

Financial Performance - Q4 2024 - Revenue increased by 8.9% in local currency, reaching $376.42 million compared to $349.302 million in Q4 2023 [36] - Adjusted operating income rose by 20.8% to $42.852 million from $35.904 million in Q4 2023 [36] - Adjusted diluted EPS increased by 29.4% to $0.65 from $0.51 in Q4 2023 [36] - Adjusted EBITDA increased by 18.8% to $61.100 million from $52.012 million in Q4 2023, with the adjusted EBITDA margin improving by 130 bps to 16.2% [36, 38] Financial Performance - Full Year 2024 - Free cash flow increased by 19.7% to $97.9 million compared to $81.8 million in 2023 [39] - Total debt decreased to $633.4 million, resulting in a net debt to credit adjusted EBITDA ratio of 2.3x [39] Segment Performance - Color Group revenue increased by 7.3% in local currency for the full year [9] - Flavors & Extracts Group revenue increased by 7.1% in local currency for the full year [15] - Asia Pacific Group revenue increased by 13.0% in local currency for the full year [19] 2025 Outlook - The company anticipates mid-single-digit growth in local currency revenue [22] - The company anticipates mid-to-high single-digit growth in local currency adjusted EBITDA [23] - The company anticipates high single-digit to double-digit growth in local currency adjusted EPS [24] Natural Color Trend - Natural colors constitute approximately 60% of the company's food and pharmaceutical product line revenue and about 20% of the total company revenue [33]

Financial Performance - Reported revenue increased by 7.8% to $376.4 million in Q4 2024, compared to $349.3 million in Q4 2023[5] - Reported operating income surged to $42.0 million, a 420.8% increase from $8.1 million in Q4 2023[5] - Earnings per share (EPS) was reported at $0.71 in Q4 2024, compared to a loss of $0.14 in Q4 2023, marking a significant turnaround[5] - Total revenue for the year ended December 31, 2024, was $1.557 billion, reflecting a 6.9% increase from $1.456 billion in 2023[26] - Net earnings for the year ended December 31, 2024, increased to $124,666,000, a 33.5% rise from $93,394,000 in 2023[30] - Adjusted operating income for the year ended December 31, 2024, was $198,210,000, reflecting an 8.4% increase from $182,864,000 in 2023[32] - The company reported a diluted earnings per share (EPS) of $2.94 for 2024, up 33.0% from $2.21 in 2023[32] - Adjusted EBITDA for the year ended December 31, 2024, was $268,623 million, reflecting a 7.6% increase from $249,617 million in 2023[41] - Credit Adjusted EBITDA for the year ended December 31, 2024, was $267,718 million, compared to $248,855 million in 2023[42] Segment Performance - The Flavors & Extracts Group revenue increased by 2.8% to $188.1 million, while the Color Group revenue rose by 11.8% to $158.1 million in Q4 2024[6] - The Asia Pacific Group reported a revenue increase of 26.1% to $41.9 million in Q4 2024, driven by higher volumes across nearly all geographies[9] - Total revenue for the year ended December 31, 2024, grew by 7.4% compared to 2023, with significant contributions from the Flavors & Extracts segment, which saw a 7.1% increase[38] - The Flavors & Extracts segment reported an adjusted operating income of $97,094,000 for the year ended December 31, 2024, up from $87,773,000 in 2023, marking a 10.6% increase[34] - The Color segment achieved an adjusted operating income of $119,529,000 for 2024, a 13.4% increase from $105,370,000 in 2023[34] Cost Management - Corporate & Other operating expenses decreased significantly to $14.4 million in Q4 2024 from $37.2 million in Q4 2023, largely due to reduced costs from the Portfolio Optimization Plan[10] - The company recorded $0.9 million in costs related to its Portfolio Optimization Plan in Q4 2024, down from $27.8 million in the prior year[5] - Portfolio Optimization Plan costs before tax were $6,631 million in 2024, significantly lower than $27,841 million in 2023[42] Balance Sheet and Cash Flow - Cash flows from operating activities for the year ended December 31, 2024, totaled $157,151,000, slightly down from $169,697,000 in 2023[30] - The company’s total assets increased to $2,023,794,000 as of December 31, 2024, compared to $2,014,507,000 in 2023[28] - The company’s total current liabilities increased to $270,639,000 in 2024 from $236,306,000 in 2023[28] - Cash and cash equivalents at the end of the period decreased to $26,626,000 in 2024 from $28,934,000 in 2023[30] Debt and Financing - Net Debt decreased to $620,242 million in 2024 from $641,802 million in 2023, resulting in a Net Debt to Credit Adjusted EBITDA ratio of 2.3x, down from 2.6x[42] - Short-term borrowings rose to $19,848 million in 2024, compared to $13,460 million in 2023[42] - Long-term debt decreased to $613,523 million in 2024 from $645,085 million in 2023[42] Other Financial Metrics - Share-based compensation expense increased to $10,084 million in 2024, up from $8,933 million in 2023[42] - Depreciation and amortization expenses increased to $60,329 million in 2024, up from $57,820 million in 2023[42] Non-GAAP Measures - The company emphasizes the importance of non-GAAP measures for evaluating underlying operating results and performance trends[44]

Sensient Technologies Corporation Third Quarter 2024 Earnings Call October 25, 2024 Non-GAAP Financial Measures Within this document, 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, (2) percentage changes in revenue, operating income, and diluted earnings per share on an adjusted local currency basis, ...

Exhibit 99.1 Contact: Amy Agallar (414) 347-3706 investor.relations@sensient.com Sensient Technologies Corporation Reports Results for the Quarter Ended September 30, 2024 MILWAUKEE — October 25, 2024 — Sensient Technologies Corporation (NYSE: SXT), a leading provider of flavors and colors for the food, pharmaceutical, and personal care markets, today reported financial results for the third quarter ended September 30, 2024. Third Quarter Consolidated Results • Reported revenue increased 7.9% to $392.6 mill ...

Jiangsu, China, , Oct. 07, 2024 (GLOBE NEWSWIRE) -- China SXT Pharmaceuticals, Inc. ("SXTC" or the "Company"), (NASDAQ: SXTC) announced today that on October 3, 2024, the Company received a notification letter from the Nasdaq Listing Qualifications Staff of The NASDAQ Stock Market LLC ("Nasdaq") notifying the Company that the minimum bid price per share for its ordinary shares has been below $1.00 for a period of 30 consecutive business days and the Company therefore no longer meets the minimum bid price re ...