Sensient(SXT) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Sensient Technologies Corporation's unaudited consolidated financial statements and management's discussion and analysis ITEM 1. FINANCIAL STATEMENTS This section presents Sensient Technologies Corporation's unaudited consolidated financial statements and accompanying notes Consolidated Statements of Earnings This section presents the consolidated statements of earnings for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Earnings (in thousands, except per share amounts): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $414,230 | $403,525 | $806,555 | $788,195 | | Operating income | $57,706 | $49,657 | $111,236 | $99,063 | | Net earnings | $37,587 | $30,932 | $72,049 | $61,872 | | Basic EPS | $0.89 | $0.73 | $1.71 | $1.47 | | Diluted EPS | $0.88 | $0.73 | $1.69 | $1.46 | | Dividends declared per common share | $0.41 | $0.41 | $0.82 | $0.82 | Consolidated Condensed Statements of Comprehensive Income This section presents the consolidated condensed statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 Consolidated Condensed Statements of Comprehensive Income (in thousands): | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Comprehensive income | $75,982 | $8,483 | $125,409 | $35,812 | Consolidated Balance Sheets This section presents the consolidated balance sheets as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets (in thousands): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------------- | :-------------------- | | Cash and cash equivalents | $56,686 | $26,626 | | Total current assets | $1,066,082 | $961,886 | | Total assets | $2,204,561 | $2,023,794 | | Total current liabilities | $251,124 | $270,639 | | Long-term debt | $710,119 | $613,523 | | Total liabilities and shareholders' equity | $2,204,561 | $2,023,794 | | Total shareholders' equity | $1,157,121 | $1,060,986 | Consolidated Statements of Cash Flows This section presents the consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows (in thousands) for Six Months Ended June 30: | Metric | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Net cash provided by operating activities | $39,304 | $58,946 | | Net cash used in investing activities | $(41,492) | $(22,890) | | Net cash provided by (used in) financing activities | $25,988 | $(26,083) | | Net increase in cash and cash equivalents | $30,060 | $1,405 | | Cash and cash equivalents at end of period | $56,686 | $30,339 | Consolidated Statements of Shareholders' Equity This section presents the consolidated statements of shareholders' equity for the three and six months ended June 30, 2025 and 2024 Changes in Total Shareholders' Equity (in thousands): | Period | Balance at Beginning | Net Earnings | Other Comprehensive Income (Loss) | Cash Dividends Paid | Share-based Compensation | Total Shareholders' Equity at End | | :-------------------------- | :------------------- | :----------- | :-------------------------------- | :------------------ | :----------------------- | :------------------------------ | | Three Months Ended June 30, 2025 | $1,095,034 | $37,587 | $38,395 | $(17,324) | $3,739 | $1,157,121 | | Three Months Ended June 30, 2024 | $1,063,936 | $30,932 | $(22,449) | $(17,373) | $2,916 | $1,057,775 | | Six Months Ended June 30, 2025 | $1,060,986 | $72,049 | $53,360 | $(34,700) | $6,639 | $1,157,121 | | Six Months Ended June 30, 2024 | $1,053,324 | $61,872 | $(26,060) | $(34,685) | $4,911 | $1,057,775 | Notes to Consolidated Condensed Financial Statements This section provides detailed notes on accounting policies, acquisitions, debt, segment information, and other financial disclosures 1. Accounting Policies This section outlines the Company's accounting policies, including ASU 2023-07 adoption and evaluation of future ASUs - The Company adopted ASU No. 2023-07, Segment Reporting, in the fourth quarter of 2024 using a retrospective transition method, which did not have a material impact on the consolidated financial statements[22] - The Company is evaluating the potential impact of ASU No. 2023-09, Income Taxes, effective for fiscal years beginning after December 15, 2024 (Q4 2025 adoption), and ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures, effective for fiscal years beginning after December 15, 2026 (Q4 2027 adoption)[23][24] 2. Acquisition On February 14, 2025, the Company acquired Biolie SAS for $4.9 million in cash, allocating $4.6 million to goodwill - Acquired Biolie SAS, a natural color extraction business in France, on February 14, 2025[26] - Paid $4.9 million in cash for the acquisition, net of $0.2 million in assumed debt[26] - Allocated $4.6 million to goodwill; the business is part of the Color segment[26] 3. Portfolio Optimization Plan The Portfolio Optimization Plan aims to optimize facilities, with costs increasing to $45 million and expected annual savings of $8-10 million - Portfolio Optimization Plan approved in Q4 2023 to optimize production facilities and improve efficiencies[28] - Felinfach site (Flavors & Extracts segment) shut down in May 2025 and marketed for sale in June 2025[29] - Total expected cost increased to approximately $45 million (from $40 million), with $40.7 million incurred through June 30, 2025[30] - Anticipated annual operating cost reduction of approximately $8 million to $10 million, fully realized after 2025, with approximately 100 headcount reductions[30] Portfolio Optimization Plan Expenses (in thousands): | Period | Flavors & Extracts | Color | Corporate & Other | Consolidated | | :-------------------------- | :----------------- | :---- | :---------------- | :----------- | | Three Months Ended June 30, 2025 | $3,077 | $97 | $165 | $3,339 | | Six Months Ended June 30, 2025 | $5,928 | $110 | $165 | $6,203 | | Three Months Ended June 30, 2024 | $1,366 | $413 | $(27) | $1,752 | | Six Months Ended June 30, 2024 | $2,418 | $2,145 | $1 | $4,564 | [4. Trade Accounts Receivable](index=10&type=section&id=4