UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:
March 31, 2024
  

OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to
  
Commission file number: 001-07626

Sensient Technologies Corporation
(Exact name of registrant as specified in its charter)

Wisconsin
  
39-0561070
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification Number)

777 EAST WISCONSIN AVENUE, MILWAUKEE, WISCONSIN 53202-5304
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(414) 271-6755

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.10 per share
SXT
New York Stock Exchange LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer   ☒
Accelerated Filer ☐
Non-Accelerated Filer ☐
Smaller Reporting Company ☐
Emerging Growth Company ☐
  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
  
Outstanding at April 24, 2024
Common Stock, par value $0.10 per share
  
42,364,905

SENSIENT TECHNOLOGIES CORPORATION
INDEX

   
Page No.
     
PART I. FINANCIAL INFORMATION:
  
     
Item 1.
Financial Statements:
 
 

 
 
1
 

 
 
2
 
 
 
3
 
 
 
4
 
 
  
 
5
     
 
6
     
Item 2.
 12
     
Item 3.
16
     
Item 4.
16
     
PART II. OTHER INFORMATION:
  
     
Item 1.
16
     
Item 1A.
16
     
Item 2.
16
 
 
Item 5.
 16
     
Item 6
 Exhibits.  16
     
 
17
     
 
18

PART I.
FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS

SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands except per share amounts)
(Unaudited)

 
Three Months
Ended March 31,
  
             
   
2024
    
2023
  
             
Revenue
  
$
384,670
    
$
369,006
  
Cost of products sold
    
258,121
      
244,343
  
Selling and administrative expenses
    
77,143
      
73,825
  
Operating income
    
49,406
      
50,838
  
Interest expense
    
7,045
      
6,002
  
Earnings before income taxes
    
42,361
      
44,836
  
Income taxes
    
11,421
      
11,185
  
Net earnings
  
$
30,940
    
$
33,651
  
                 
Weighted average number of common shares outstanding:
                
Basic
    
42,104
      
41,970
  
Diluted
    
42,305
      
42,255
  
                 
Earnings per common share:
                
Basic
  
$
0.73
    
$
0.80
  
Diluted
  
$
0.73
    
$
0.80
  
                 
Dividends declared per common share
  
$
0.41
    
$
0.41
  

See accompanying notes to consolidated condensed financial statements.

1
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

 
Three Months
Ended March 31,
  
   
2024
    
2023
  
             
Comprehensive income
  
$
27,329
    
$
49,952
  

See accompanying notes to consolidated condensed financial statements.

2
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)


  
March 31,
2024
(Unaudited)
    
December 31,
2023
  
Assets
           
Current Assets:
            
Cash and cash equivalents
  
$
25,417
    
$
28,934
  
Trade accounts receivable
    
298,488
      
272,164
  
Inventories
    
568,547
      
598,399
  
Prepaid expenses and other current assets
    
50,391
      
37,119
  
                 
Total current assets
    
942,843
      
936,616
  
                 
Other assets
    
93,960
      
94,873
  
Deferred tax assets
    
38,444
      
41,564
  
Intangible assets, net
    
11,706
      
12,112
  
Goodwill
    
420,541
      
424,065
  
Property, Plant, and Equipment:
                
Land
    
31,496
      
31,901
  
Buildings
    
349,052
      
343,594
  
Machinery and equipment
    
794,891
      
781,789
  
Construction in progress
    
44,403
      
59,091
  
     
1,219,842
      
1,216,375
  
Less accumulated depreciation
    
(721,654)
    
(711,098)
     
498,188
      
505,277
  
                 
Total assets
  
$
2,005,682
    
$
2,014,507
  
                 
Liabilities and Shareholders’ Equity
                
                 
Current Liabilities:
                
Trade accounts payable
  
$
104,834
    
$
131,114
  
Accrued salaries, wages, and withholdings from employees
    
26,079
      
26,412
  
Other accrued expenses
    
52,503
      
52,024
  
Income taxes
    
16,004
      
13,296
  
Short-term borrowings
    
19,439
      
13,460
  
                 
Total current liabilities
    
218,859
      
236,306
  
                 
Deferred tax liabilities
    
14,072
      
14,260
  
Other liabilities
    
37,028
      
37,817
  
Accrued employee and retiree benefits
    
28,276
      
27,715
  
Long-term debt
    
643,511
      
645,085
  
Shareholders’ Equity:
                
Common stock
    
5,396
      
5,396
  
Additional paid-in capital
    
112,389
      
115,941
  
Earnings reinvested in the business
    
1,740,500
      
1,726,872
  
Treasury stock, at cost
    
(618,621)
    
(622,768)
Accumulated other comprehensive loss
    
(175,728)
    
(172,117)
                 
Total shareholders’ equity
    
1,063,936
      
1,053,324
  
                 
Total liabilities and shareholders’ equity
  
$
2,005,682
    
$
2,014,507
  

See accompanying notes to consolidated condensed financial statements.

3
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 
Three Months
Ended March 31,
  
   
2024
    
2023
  
             
Cash flows from operating activities:
            
Net earnings
  
$
30,940
    
$
33,651
  
Adjustments to arrive at net cash provided by operating activities:
                
Depreciation and amortization
    
14,709
      
14,150
  
Share-based compensation expense
    
1,995
      
2,267
  
Net (gain) loss on assets
    
(193
)
    
8
  
Portfolio Optimization Plan costs
     1,189       -  
Deferred income taxes
    
(4
)
    
(2,351
)
Changes in operating assets and liabilities:
                
Trade accounts receivable
    
(28,331
)
    
(7,142
)
Inventories
    
26,624
      
(4,374
)
Prepaid expenses and other assets
    
(13,655
)
    
(2,062
)
Accounts payable and other accrued expenses
    
(21,993
)
    
(19,251
)
Accrued salaries, wages, and withholdings from employees
    
29
      
(21,187
)
Income taxes
    
3,150
      
2,548
  
Other liabilities
    
674
      
698
  
                 
Net cash provided by (used in) operating activities
    
15,134
      
(3,045
)
                 
Cash flows from investing activities:
                
Acquisition of property, plant, and equipment
    
(11,030
)
    
(22,278
)
Proceeds from sale of assets
    
93
      
1
  
Other investing activities
    
(1
)
    
(602
)
                 
Net cash used in investing activities
    
(10,938
)
    
(22,879
)
                 
Cash flows from financing activities:
                
Proceeds from additional borrowings
    
38,053
      
50,827
  
Debt payments
    
(27,031
)
    
(1,351
)
Dividends paid
    
(17,312
)
    
(17,255
)
Other financing activities
    
(2,828
)
    
(7,669
)
                 
Net cash (used in) provided by financing activities
    
(9,118
)
    
24,552
  
                 
Effect of exchange rate changes on cash and cash equivalents
    
1,405
      
4,468
  
                 
Net (decrease) increase in cash and cash equivalents
    
(3,517
)
    
3,096
  
Cash and cash equivalents at beginning of period
    
28,934
      
20,921
  
Cash and cash equivalents at end of period
  
$
25,417
    
$
24,017
  

See accompanying notes to consolidated condensed financial statements.

4
SENSIENT TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share and per share amounts)
(Unaudited)

 
   
   
   
Treasury Stock
    

   

 
Three Months Ended March 31, 2024
  
Common
Stock
    
Additional
Paid-In
Capital
    
Earnings
Reinvested
in the
Business
    
Shares
    
Amount
    
Accumulated
Other
Comprehensive
Income (Loss)
    
Total
Equity
  
Balances at December 31, 2023
  
$
5,396
    
$
115,941
    
$
1,726,872
      
11,885,398
    
$
(622,768
)
  
$
(172,117
)
  
$
1,053,324
  
Net earnings
    
-
      
-
      
30,940
      
-
      
-
      
-
      
30,940
  
Other comprehensive loss
    
-
      
-
      
-
      
-
      
-
      
(3,611
)
    
(3,611
)
Cash dividends paid – $0.41 per share
    
-
      
-
      
(17,312
)
    
-
      
-
      
-
      
(17,312
)
Share-based compensation
    
-
      
1,995
      
-
      
-
      
-
      
-
      
1,995
  
Non-vested stock issued upon vesting
    
-
      
(5,365
)
    
-
      
(102,396
)
    
5,365
      
-
      
-
  
Benefit plans
     -       299       -       (21,405 )     1,122       -       1,421  
Other
    
-
      
(481
)
    
-
      
44,652
      
(2,340
)
    
-
      
(2,821
)
Balances at March 31, 2024
  
$
5,396
    
$
112,389
    
$
1,740,500
      
11,806,249
    
$
(618,621
)
  
$
(175,728
)
  
$
1,063,936
  

Three Months Ended March 31, 2023
                                          
Balances at December 31, 2022
   $ 5,396     $ 124,043     $ 1,702,700       12,058,773     $ (631,853 )   $ (200,688 )   $ 999,598  
Net earnings
     -       -       33,651       -       -       -       33,651  
Other comprehensive income
     -       -       -       -       -       16,301       16,301  
Cash dividends paid – $0.41 per share
     -       -       (17,255 )     -       -       -       (17,255 )
Share-based compensation
     -       2,267       -       -       -       -       2,267  
Non-vested stock issued upon vesting
     -       (11,956 )     -       (228,181 )     11,956       -       -  
Benefit plans
     -       375       -       (18,172 )     952       -       1,327  
Other
     -       (2,140 )     -       105,524       (5,528 )     -       (7,668 )
Balances at March 31, 2023
   $ 5,396     $ 112,589     $ 1,719,096       11,917,944     $ (624,473 )   $ (184,387 )   $ 1,028,221  

See accompanying notes to consolidated condensed financial statements.
5
SENSIENT TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1.
Accounting Policies

In the opinion of Sensient Technologies Corporation (the Company), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) that are necessary to present fairly the financial position of the Company as of March 31, 2024, and the results of operations, comprehensive income, cash flows, and shareholders’ equity for the three months ended March 31, 2024 and 2023. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Expenses are charged to operations in the period incurred.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to provide disclosures of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to consistently categorize, and provide greater disaggregation of, information in the rate reconciliation table and further disaggregate income tax payments by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2023, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.

2.
Portfolio Optimization Plan

During the fourth quarter of 2023, the board of directors of the Company approved a plan to undertake an effort to optimize certain production facilities and improve efficiencies within the Company (Portfolio Optimization Plan). As part of the Portfolio Optimization Plan, in the Flavors & Extracts segment, the Company began evaluating the potential closure of its manufacturing facility in Felinfach, Wales, United Kingdom, the potential closure of its sales office in Granada, Spain, and the potential centralization and elimination of certain selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. In addition, in the Color segment, the Company’s proposals include closing a manufacturing facility in Delta, British Columbia, Canada, closing a sales office in Argentina, and centralizing and eliminating certain production positions as well as potentially eliminating some selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. The Company reports all costs associated with the Portfolio Optimization Plan in the Corporate & Other segment.

The Company recorded non-cash impairment charges in Selling and Administrative Expenses, primarily related to certain property, plant, and equipment during the three months ended March 31, 2024, when the estimated fair value of these assets was lower than the carrying value. The property, plant, and equipment related to a product line that was shut down and determined to not be usable at other plant locations.
6
The Company recorded $3.4 million and $3.7 million of accrued liabilities in Other Accrued Expenses on the Company’s Consolidated Balance Sheet related to this plan as of March 31, 2024 and December 31, 2023, respectively. The Company expects this plan will cost approximately $40 million, primarily related to non-cash impairment charges and proposed employee separation costs, and upon completion would reduce annual operating costs by approximately $8 million to $10 million, with the full benefit expected to be achieved after 2025. The Company proposes to reduce headcount by approximately 120 positions, primarily in the Flavors & Extracts and Color segments, related to certain production and selling and administrative positions.

The following table summarizes the Portfolio Optimization Plan expenses by segment for the three months ended March 31, 2024:

 
(In thousands)
  
Flavors &
Extracts
    

Color
    
Corporate 
& Other
    
Consolidated
  
Non-cash impairment charges – Selling and administrative expenses
  
$
-
    
$
975
    
$
-
    
$
975
  
Non-cash charges – Cost of products sold
    
125
      
(18
)
    
-
      
107
  
Employee separation – Selling and administrative expenses
    
611
      
491
      
28
      
1,130
  
Other costs – Selling and administrative expenses(1)
    
316
      
284
      
-
      
600
  
Total
  
$
1,052
    
$
1,732
    
$
28
    
$
2,812
  


(1)
Other costs include professional services, accelerated depreciation, accelerated lease costs, and other related costs.

3.
Trade Accounts Receivable

Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions. Forecasted economic conditions have not had a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables; however, the Company will continue to monitor and evaluate the rapidly changing economic conditions. Additionally, as the Company only has one portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.

The following table summarizes the changes in the allowance for doubtful accounts during the three-month periods ended March 31, 2024 and 2023:

(In thousands)
Three Months Ended March 31, 2024
  
Allowance for
Doubtful Accounts
  
Balance at December 31, 2023
  
$
4,373
  
Provision for expected credit losses
    
307
  
Accounts written off
    
(747
)
Translation and other activity
    
(51
)
Balance at March 31, 2024
  
$
3,882
  

(In thousands)
Three Months Ended March 31, 2023
  
Allowance for
Doubtful Accounts
  
Balance at December 31, 2022
  
$
4,436
  
Provision for expected credit losses
    
120
  
Accounts written off
    
(614
)
Translation and other activity
    
103
  
Balance at March 31, 2023
  
$
4,045
  

4.
Inventories
 
At March 31, 2024, and December 31, 2023, inventories included finished and in-process products totaling $416.9 million and $437.1 million, respectively, and raw materials and supplies of $151.6 million and $161.3 million, respectively.

7
5.
Fair Value

Accounting Standards Codification 820, Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of March 31, 2024 and December 31, 2023. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was an asset of $1.4 million and $1.0 million as of March 31, 2024 and December 31, 2023, respectively. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at March 31, 2024 and December 31, 2023, was $643.6 million and $645.2 million, respectively. The fair value of the long-term debt at March 31, 2024 and December 31, 2023, was $648.6 million and $653.7 million, respectively.

6.
Segment Information

The Company evaluates performance based on operating income before share-based compensation; restructuring and other charges, including Portfolio Optimization Plan costs; interest expense; and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation.

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. The Company’s three reportable segments are the Flavors & Extracts and Color segments, which are both managed on a product line basis, and the Asia Pacific segment, which is managed on a geographic basis. The Company’s Flavors & Extracts segment produces flavor, extracts, and essential oils products that impart a desired taste, texture, aroma, or other characteristics to a broad range of consumer and other products. The Color segment produces natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications. The Asia Pacific segment is managed on a geographic basis and produces and distributes color, flavor, and essential oils products in the Asia Pacific countries. The Company’s corporate expenses, share-based compensation, and restructuring and other charges, including Portfolio Optimization Plan costs, are included in the “Corporate & Other” category.

Operating results by segment for the periods presented are as follows:

(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia
Pacific
    
Corporate &
Other
    
Consolidated
  
Three months ended March 31, 2024:
                              
Revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
-
    
$
384,670
  
Intersegment revenue
    
5,070
      
3,661
      
22
      
-
      
8,753
  
Total revenue
  
$
193,092
    
$
160,025
    
$
40,306
    
$
-
    
$
393,423
  
                                         
Operating income (loss)
  
$
23,678
    
$
31,679
    
$
8,776
    
$
(14,727
)
  
$
49,406
  
Interest expense
    
-
      
-
      
-
      
7,045
      
7,045
  
Earnings (loss) before income taxes
  
$
23,678
    
$
31,679
    
$
8,776
    
$
(21,772
)
  
$
42,361
  
                                         
Three months ended March 31, 2023:
                                        
Revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
-
    
$
369,006
  
Intersegment revenue
    
6,880
      
4,212
      
-
      
-
      
11,092
  
Total revenue
  
$
178,852
    
$
161,161
    
$
40,085
    
$
-
    
$
380,098
  
                                         
Operating income (loss)
  
$
22,180
    
$
31,885
    
$
9,241
    
$
(12,468
)
  
$
50,838
  
Interest expense
    
-
      
-
      
-
      
6,002
      
6,002
  
Earnings (loss) before income taxes
  
$
22,180
    
$
31,885
    
$
9,241
    
$
(18,470
)
  
$
44,836
  

8
Product Lines

(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia Pacific
    
Consolidated
  
Three months ended March 31, 2024
                        
Flavors, Extracts & Flavor Ingredients
  
$
124,805
    
$
-
    
$
-
    
$
124,805
  
Natural Ingredients
    
68,287
      
-
      
-
      
68,287
  
Food & Pharmaceutical Colors
    
-
      
117,058
      
-
      
117,058
  
Personal Care
    
-
      
42,967
      
-
      
42,967
  
Asia Pacific
    
-
      
-
      
40,306
      
40,306
  
Intersegment Revenue
    
(5,070
)
    
(3,661
)
    
(22
)
    
(8,753
)
Total revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
384,670
  
                                 
Three months ended March 31, 2023:
                                
Flavors, Extracts & Flavor Ingredients
  
$
124,825
    
$
-
    
$
-
    
$
124,825
  
Natural Ingredients
    
54,027
      
-
      
-
      
54,027
  
Food & Pharmaceutical Colors
    
-
      
118,747
      
-
      
118,747
  
Personal Care
    
-
      
42,414
      
-
      
42,414
  
Asia Pacific
    
-
      
-
      
40,085
      
40,085
  
Intersegment Revenue
    
(6,880
)
     (4,212 )    
-
      
(11,092
)
Total revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
369,006
  

Geographic Markets

(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia Pacific
    
Consolidated
  
Three months ended March 31, 2024:
                        
North America
  
$
146,952
    
$
75,120
    
$
-
    
$
222,072
  
Europe
    
32,157
      
46,162
      
46
      
78,365
  
Asia Pacific
    
3,706
      
17,419
      
38,685
      
59,810
  
Other
    
5,207
      
17,663
      
1,553
      
24,423
  
Total revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
384,670
  
                                 
Three months ended March 31, 2023:
                                
North America
  
$
131,968
    
$
78,377
    
$
62
    
$
210,407
  
Europe
    
28,927
      
43,252
      
103
      
72,282
  
Asia Pacific
    
5,201
      
18,149
      
39,195
      
62,545
  
Other
    
5,876
      
17,171
      
725
      
23,772
  
Total revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
369,006
  

7.
Retirement Plans

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:


 
Three Months Ended
March 31,
  
(In thousands)
  
2024
    
2023
  
Service cost
  
$
372
    
$
368
  
Interest cost
     401       409  
Expected return on plan assets
    
(242
)
    
(239
)
Recognized actuarial gain
     (91 )     (139 )
Total defined benefit expense
  
$
440
    
$
399
  

The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings.

9
8.
Derivative Instruments and Hedging Activity

The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk in order to reduce the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales, and other known foreign currency exposures. These forward exchange contracts generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below.

Forward exchange contracts – Certain forward exchange contracts have been designated as cash flow hedges. The Company had $44.5 million and $58.4 million of forward exchange contracts designated as cash flow hedges outstanding as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024 and 2023, the amounts reclassified into net earnings in the Company’s Consolidated Statements of Earnings that offset the underlying transactions’ impact on earnings in the same period were not material. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges. The results of these transactions were not material to the financial statements.

Net investment hedges – The Company has designated certain foreign currency denominated long-term borrowings as partial hedges of the Company’s foreign currency net asset positions. As of March 31, 2024 and December 31, 2023, the total value of the Company’s net investment hedges was $306.7 million and $313.3 million, respectively. These net investment hedges included Euro and British Pound denominated long-term debt. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in Other Comprehensive Income (OCI). For the three months ended March 31, 2024 and 2023, the impact of foreign exchange rates on these debt instruments decreased debt by $6.6 million and increased debt by $4.4 million, respectively, which has been recorded as foreign currency translation in OCI.

9.
Income Taxes

The effective income tax rates for the three months ended March 31, 2024 and 2023, were 27.0% and 24.9%, respectively. The effective tax rates for the three months ended March 31, 2024 and 2023 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings. The effective tax rate for the three months ended March 31, 2024, was also impacted by the limited tax deductibility of costs related to the Portfolio Optimization Plan.

10.
Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three-month periods ended March 31, 2024 and 2023:

(In thousands)
  
Cash Flow
Hedges (1)
    
Pension
Items (1)
    
Foreign
Currency
Items
    
Total
  
Balances at December 31, 2023
  
$
997
    
$
(2,079
)
  
$
(171,035
)
  
$
(172,117
)
Other comprehensive income (loss) before reclassifications
    
702
      
-
      
(4,023
)
    
(3,321
)
Amounts reclassified from OCI
    
(222
)
    
(68
)
    
-
      
(290
)
Balances at March 31, 2024
  
$
1,477
    
$
(2,147
)
  
$
(175,058
)
  
$
(175,728
)

(In thousands)
  
Cash Flow
Hedges (1)
    
Pension
Items (1)
    
Foreign
Currency
Items
    
Total
  
Balances at December 31, 2022
  
$
(599
)
  
$
(1,792
)
  
$
(198,297
)
  
$
(200,688
)
Other comprehensive income before reclassifications
    
1,700
      
-
      
14,841
      
16,541
  
Amounts reclassified from OCI
    
(118
)
    
(122
)
    
-
      
(240
)
Balances at March 31, 2023
  
$
983
    
$
(1,914
)
  
$
(183,456
)
  
$
(184,387
)


(1)
Cash Flow Hedges and Pension Items are net of tax.

10
11.
Commitments and Contingencies


The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.

12.
Subsequent Event

On April 25, 2024, the Company announced its quarterly dividend of $0.41 per share would be payable on June 3, 2024.

11
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that reflect management’s current assumptions and estimates of future economic circumstances, industry conditions, Company performance, and financial results. Forward-looking statements include statements in the future tense, statements referring to any period after March 31, 2024, and statements including the terms “expect,” “believe,” “anticipate,” and other similar terms that express expectations as to future events or conditions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that could cause actual events to differ materially from those expressed in the forward-looking statements. A variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results. These factors and assumptions include, among others, the Company’s ability to manage general business, economic, and capital market conditions, including actions taken by customers in response to such market conditions, and the impact of recessions and economic downturns; the impact of macroeconomic and geopolitical volatility, including inflation and shortages impacting the availability and cost of raw materials, energy, and other supplies, disruptions and delays in the Company’s supply chain, and the conflicts between Russia and Ukraine and Israel and Hamas and other parties in the Middle East; the availability and cost of labor, logistics, and transportation; 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 Portfolio Optimization Plan; 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; the Company’s ability to enhance its innovation efforts and drive cost efficiencies; currency exchange rate fluctuations; and the matters discussed under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Except to the extent required by applicable law, 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 therein will not be realized.

OVERVIEW

Revenue
Revenue was $384.7 million and $369.0 million for the three months ended March 31, 2024 and 2023, respectively.  The increase in revenue was primarily due to higher volumes and favorable pricing. For the three months ended March 31, 2024, foreign exchange rates had an immaterial impact on revenue.

Gross Margin
The Company’s gross margin was 32.9% and 33.8% for the three months ended March 31, 2024 and 2023, respectively. The decrease in gross margin was primarily due to higher raw material costs, partially offset by an increase in pricing.

Selling and Administrative Expenses
Selling and administrative expense as a percent of revenue was 20.1% and 20.0% for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, selling and administrative expenses were increased by Portfolio Optimization Plan costs totaling $2.7 million, which increased selling and administrative expenses as a percent of revenue by approximately 70 basis points.  See Portfolio Optimization Plan below for further information. This increase was largely offset as a percent of revenue due to increased operating leverage due to revenue growth without corresponding increases in selling and administrative expenses.

Operating Income
Operating income was $49.4 million and $50.8 million for the three months ended March 31, 2024 and 2023, respectively. Operating margins were 12.8% and 13.8% for the three months ended March 31, 2024 and 2023, respectively. Portfolio Optimization Plan costs decreased operating margins by approximately 80 basis points for the three months ended March 31, 2024.

Interest Expense
Interest expense was $7.0 million and $6.0 million for the three months ended March 31, 2024 and 2023, respectively. The increase in expense was primarily due to an increase in the average interest rate.

12
Income Taxes
The effective income tax rates for the three months ended March 31, 2024 and 2023, were 27.0% and 24.9%, respectively. The effective tax rates for the three months ended March 31, 2024 and 2023, were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings. The effective tax rate for the three months ended March 31, 2024 was also impacted by the limited tax deductibility of costs related to the Portfolio Optimization Plan.

Portfolio Optimization Plan
During the fourth quarter of 2023, the board of directors of the Company approved a plan to undertake an effort to optimize certain production facilities and improve efficiencies within the Company (Portfolio Optimization Plan). As part of the Portfolio Optimization Plan, in the Flavors & Extracts segment, the Company began evaluating the potential closure of its manufacturing facility in Felinfach, Wales, United Kingdom, the potential closure of its sales office in Granada, Spain, and the potential centralization and elimination of certain selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. In addition, in the Color segment, the Company’s proposals include closing a manufacturing facility in Delta, British Columbia, Canada, closing a sales office in Argentina, and centralizing and eliminating certain production positions as well as potentially eliminating some selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. The Company reports all costs associated with the Portfolio Optimization Plan in the Corporate & Other segment.

In the three months ended March 31, 2024, the Company incurred $2.8 million related to the Portfolio Optimization Plan recorded in Corporate & Other, primarily for costs associated with employee separation and impairment of fixed assets.

NON-GAAP FINANCIAL MEASURES

Within the following tables, 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, and (2) percentage changes in revenue, operating income, and diluted earnings per share on an adjusted local currency basis, which eliminate the effects that result from translating its international operations into U.S. dollars and restructuring and other costs, including the Portfolio Optimization Plan costs.

The Company has included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable year-over-year 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 report. 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 the Company believes 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.

   
Three Months Ended March 31,
  
(In thousands except per share amounts)
  
2024
    
2023
    
% Change
  
Operating Income (GAAP)
  
$
49,406
    
$
50,838
      
(2.8
)%
Portfolio Optimization Plan costs – Cost of products sold
    
107
      
-
          
Portfolio Optimization Plan costs – Selling and administrative expenses
    
2,705
      
-
          
Adjusted operating income
  
$
52,218
    
$
50,838
      
2.7
%
                         
Net Earnings (GAAP)
  
$
30,940
    
$
33,651
      
(8.1
)%
Portfolio Optimization Plan costs, before tax
    
2,812
       -          
Tax impact of Portfolio Optimization Plan costs(1)
    
(355
)
     -          
Adjusted net earnings
  
$
33,397
    
$
33,651
      
(0.8
)%
                         
Diluted Earnings Per Share (GAAP)
  
$
0.73
    
$
0.80
      
(8.8
)%
Portfolio Optimization Plan costs, net of tax
    
0.06
      
-
          
Adjusted diluted earnings per share
  
$
0.79
    
$
0.80
      
(1.3
)%

(1) Tax impact adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.

Portfolio Optimization Plan costs are discussed under “Portfolio Optimization Plan” above and Note 2, Portfolio Optimization Plan, in the Notes to the Consolidated Financial Statements included in this report.

Note: Earnings per share calculations may not foot due to rounding differences.

13
The following table summarizes the percentage change for the results of the three months ended March 31, 2024, compared to the results for the three months ended March 31, 2023, in the respective financial measures.

   
Three Months Ended March 31, 2024
  
   
Total
  
Foreign
Exchange
Rates
  


Adjustments(1)
    
 Adjusted
Local
Currency
  
Revenue
                        
Flavors & Extracts
  
8.0%
    
1.1%
    
N/A
  
6.9%
  
Color
  
(0.7%)
    
1.0%
    
N/A
  
(1.7%)
  
Asia Pacific
  
0.6%
    
(3.5%)
    
N/A
  
4.1%
  
Total Revenue
  
4.2%
    
0.4%
    
N/A
  
3.8%
  
                              
Operating Income
                            
Flavors & Extracts
  
6.8%
    
0.5%
    
0.0%
  

6.3%
  
Color
  
(0.6%)
    
1.2%
    
0.0%
  

(1.8%)
  
Asia Pacific
  
(5.0%)
    
(4.4%)
    
0.0%
  

(0.6%)
  
Corporate & Other
  
18.1%
    
0.0%
    
22.5%
  
(4.4%)
  
Total Operating Income
  
(2.8%)
    
0.2%
    
(5.6%)
  
2.6%
  
Diluted Earnings per Share
  
(8.8%)
    
0.0%
    
(7.5%)
  

(1.3%)
  

(1)
 Adjustments consist of Portfolio Optimization Plan costs.

Note: Refer to table above for a reconciliation of these non-GAAP measures.

SEGMENT INFORMATION

The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. Segment performance is evaluated on operating income before share-based compensation; restructuring and other costs, including the Portfolio Optimization Plan costs and other costs (which are reported in Corporate & Other); interest expense; and income taxes.

The Company’s reportable segments consist of the Flavors & Extracts, Color, and Asia Pacific segments.

Flavors & Extracts
Flavors & Extracts segment revenue was $193.1 million and $178.9 million for the three months ended March 31, 2024 and 2023, respectively, an increase of approximately 8%. The increase was primarily a result of higher revenue in Natural Ingredients, primarily due to higher volumes. Foreign exchange rates increased segment revenue by approximately 1%.

Flavors & Extracts segment operating income was $23.7 million and $22.2 million for the three months ended March 31, 2024 and 2023, respectively, an increase of approximately 7%. The higher segment operating income was a result of higher operating income in Flavors, Extracts & Flavor Ingredients, partially offset by lower operating income in Natural Ingredients. The higher operating income in Flavors, Extracts & Flavor Ingredients was primarily due to lower raw material costs and higher selling prices. The lower operating income in Natural Ingredients was primarily due to higher raw material costs, partially offset by higher volumes. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 12.3% in the current quarter compared to 12.4% in the prior year’s comparable quarter.

14
Color
Segment revenue for the Color segment was $160.0 million and $161.2 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 1%. The decrease was primarily a result of lower revenue in Food & Pharmaceutical Colors, primarily due to lower volumes, partially offset by the favorable impact of foreign exchange rates that increased segment revenue by approximately 1%.

Segment operating income for the Color segment was $31.7 million and $31.9 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 1%. Foreign exchange rates increased segment operating income by approximately 1%. Segment operating income as a percent of revenue was 19.8% for both the three months ended March 31, 2024 and 2023.

Asia Pacific
Segment revenue for the Asia Pacific segment was $40.3 million and $40.1 million for the three months ended March 31, 2024 and 2023, respectively, an increase of approximately 1%. Foreign exchange rates decreased segment revenue by approximately 4%.

Segment operating income for the Asia Pacific segment was $8.8 million and $9.2 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of approximately 5%. Foreign exchange rates decreased segment operating income by approximately 4%. Segment operating income as a percent of revenue was 21.8% in the current quarter and 23.1% in the prior year’s comparable quarter.

Corporate & Other
The Corporate & Other operating expense was $14.7 million and $12.5 million for the three months ended March 31, 2024 and 2023, respectively. The higher operating expense was primarily a result of Portfolio Optimization Plan costs totaling $2.8 million negatively impacting the three months ended March 31, 2024. See the Portfolio Optimization Plan section above for further information.

LIQUIDITY AND FINANCIAL CONDITION

Financial Condition
The Company’s financial position remains strong. The Company is in compliance with its loan covenants calculated in accordance with applicable agreements as of March 31, 2024. The Company expects its cash flow from operations and its existing debt capacity can be used to meet anticipated future cash requirements for operations, capital expenditures, and dividend payments, as well as potential acquisitions and stock repurchases. The Company’s contractual obligations consist primarily of operational commitments, which we expect to continue to be able to satisfy through cash generated from operations and debt. The Company has various series of notes outstanding that mature from 2024 through 2029. The Company believes that it has the ability to refinance or repay these obligations through a combination of cash flow from operations, issuance of additional notes, and sufficient borrowing capacity under the Company’s revolving credit facility, which matures in 2026.

As a result of our ability to manage the impact of inflation through pricing and other actions, the impact of inflation was not material to the Company’s financial position and its results of operations for the three months ended March 31, 2024. The Company has experienced increased costs for certain inputs, such as raw materials, shipping and logistics, and labor-related costs. We continue to expect to manage these impacts in the near term, but persistent, accelerated, or expanded inflationary conditions could exacerbate these challenges and impact our profitability.

Cash Flows from Operating Activities
Net cash provided by operating activities was $15.1 million and net cash used in operating activities was $3.0 million for the three months ended March 31, 2024 and 2023, respectively. The increase in net cash provided by operating activities was primarily due to a decrease in the cash used for performance-based compensation payments made during 2024 compared to 2023 and an increase in cash provided by inventory during 2024 compared to 2023, partially offset by a decrease in cash provided by accounts receivable.

Cash Flows from Investing Activities
Net cash used in investing activities was $10.9 million and $22.9 million during the three months ended March 31, 2024 and 2023, respectively. Capital expenditures were $11.0 million and $22.3 million during the three months ended March 31, 2024 and 2023, respectively.

Cash Flows from Financing Activities
Net cash used in financing activities was $9.1 million and net cash provided by financing activities was $24.6 million for the three months ended March 31, 2024 and 2023, respectively. Net debt increased by $11.0 million and $49.5 million for the three months ended March 31, 2024 and 2023, respectively. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of $17.3 million were paid during each of the three months ended March 31, 2024 and 2023. Dividends paid per share were $0.41 for both the three months ended March 31, 2024 and 2023.

15
CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s critical accounting policies during the quarter ended March 31, 2024. For additional information about the Company’s critical accounting policies, refer to “Critical Accounting Policies” under Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk during the quarter ended March 31, 2024. For additional information about market risk, refer to Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 4.
CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: The Company carried out an evaluation, under the supervision and with the participation of management, including the Company’s Chairman, President, and Chief Executive Officer and its Senior Vice President and Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of the disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based upon that evaluation, the Company’s Chairman, President, and Chief Executive Officer and its Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting: There have been no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.   OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

See Part I, Item 1, Note 11, Commitments and Contingencies, of this report for information regarding legal proceedings in which the Company is involved.

ITEM 1A. 
RISK FACTORS

There were no material changes to the risk factors previously disclosed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On October 19, 2017, the Board of Directors authorized the repurchase of up to three million shares (2017 Authorization). As of March 31, 2024, 1,267,019 shares had been repurchased under the 2017 Authorization. There is no expiration date for the 2017 Authorization. The 2017 Authorization may be modified, suspended, or discontinued by the Board of Directors at any time. As of March 31, 2024, the maximum number of shares that may be purchased under publicly announced plans is 1,732,981. No shares were purchased by the Company during the three months ended March 31, 2024.

ITEM 5.
OTHER INFORMATION

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6.
EXHIBITS

The exhibits listed in the following Exhibit Index are filed as part of this Quarterly Report on Form 10-Q.

16
 SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2024

Exhibit
Description
Incorporated by Reference From
Filed Herewith
       
Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
  
X
       
Certifications of the Company’s Chairman, President & Chief Executive Officer and Senior Vice President & Chief Financial Officer pursuant to 18 United States Code § 1350
  
X
       
101.INS
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
  
X
       
101.SCH
Inline XBRL Taxonomy Extension Schema Document
  
X
       
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
 
  
X
       
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
  
X
       
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
 
  
X
       
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
 
  
X
       
104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
  
X

17
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

   
SENSIENT TECHNOLOGIES CORPORATION
  
         
Date:
May 7, 2024
By:
 /s/  John J. Manning
  
     
John J.Manning, Senior Vice
  
       President, General Counsel &  
     
Secretary
  
         
Date:
May 7, 2024
By:
/s/  Stephen J. Rolfs
  
     
Stephen J. Rolfs, Senior Vice
 
     
President & Chief Financial Officer
  


18
EXHIBIT 31

CERTIFICATION
Pursuant to Rule 13a-14(a) of the Exchange Act

I, Paul Manning, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and


b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     May 7, 2024
  
   
/s/ Paul Manning
  
Paul Manning, Chairman, President &
  
Chief Executive Officer
  

EXHIBIT 31

CERTIFICATION
Pursuant to Rule 13a-14(a) of the Exchange Act

I, Stephen J. Rolfs, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and


b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:     May 7, 2024
  
   
/s/ Stephen J. Rolfs
  
Stephen J.Rolfs, Senior Vice President &
  
Chief Financial Officer
  


EXHIBIT 32

CERTIFICATION
Pursuant to 18 United States Code § 1350

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, of Sensient Technologies Corporation (the “Company”) filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Paul Manning  
 
Name:  
 Paul Manning  
 
Title:
Chairman, President & Chief Executive Officer
  
 
Date:
May 7, 2024
  

A signed original of this written statement required by Section 906 has been provided to Sensient Technologies Corporation and will be retained by Sensient Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32

CERTIFICATION
Pursuant to 18 United States Code § 1350

The undersigned hereby certifies that the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024, of Sensient Technologies Corporation (the “Company”) filed with the Securities and Exchange Commission on or about the date hereof fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Stephen J. Rolfs  
 
Name:  
Stephen J. Rolfs  
 
Title:
Senior Vice President & Chief Financial Officer
  
 
Date:
May 7, 2024
  

A signed original of this written statement required by Section 906 has been provided to Sensient Technologies Corporation and will be retained by Sensient Technologies Corporation and furnished to the Securities and Exchange Commission or its staff upon request.


v3.24.1.u1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2024
Apr. 24, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2024  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Document Transition Report false  
Entity File Number 001-07626  
Entity Registrant Name Sensient Technologies Corp  
Entity Central Index Key 0000310142  
Entity Incorporation, State or Country Code WI  
Entity Tax Identification Number 39-0561070  
Entity Address, Address Line One 777 EAST WISCONSIN AVENUE  
Entity Address, City or Town MILWAUKEE  
Entity Address, State or Province WI  
Entity Address, Postal Zip Code 53202-5304  
City Area Code 414  
Local Phone Number 271-6755  
Title of 12(b) Security Common stock, par value $0.10 per share  
Trading Symbol SXT  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   42,364,905
v3.24.1.u1
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
CONSOLIDATED STATEMENTS OF EARNINGS [Abstract]    
Revenue $ 384,670 $ 369,006
Cost of products sold 258,121 244,343
Selling and administrative expenses 77,143 73,825
Operating income 49,406 50,838
Interest expense 7,045 6,002
Earnings before income taxes 42,361 44,836
Income taxes 11,421 11,185
Net earnings $ 30,940 $ 33,651
Weighted average number of common shares outstanding:    
Basic (in shares) 42,104 41,970
Diluted (in shares) 42,305 42,255
Earnings per common share:    
Basic (in dollars per share) $ 0.73 $ 0.8
Diluted (in dollars per share) 0.73 0.8
Dividends declared per common share (in dollars per share) $ 0.41 $ 0.41
v3.24.1.u1
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]    
Comprehensive income $ 27,329 $ 49,952
v3.24.1.u1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 25,417 $ 28,934
Trade accounts receivable 298,488 272,164
Inventories 568,547 598,399
Prepaid expenses and other current assets 50,391 37,119
Total current assets 942,843 936,616
Other assets 93,960 94,873
Deferred tax assets 38,444 41,564
Intangible assets, net 11,706 12,112
Goodwill 420,541 424,065
Property, Plant, and Equipment:    
Land 31,496 31,901
Buildings 349,052 343,594
Machinery and equipment 794,891 781,789
Construction in progress 44,403 59,091
Property, plant, and equipment, gross 1,219,842 1,216,375
Less accumulated depreciation (721,654) (711,098)
Property, plant, and equipment, net 498,188 505,277
Total assets 2,005,682 2,014,507
Current Liabilities:    
Trade accounts payable 104,834 131,114
Accrued salaries, wages, and withholdings from employees 26,079 26,412
Other accrued expenses 52,503 52,024
Income taxes 16,004 13,296
Short-term borrowings 19,439 13,460
Total current liabilities 218,859 236,306
Deferred tax liabilities 14,072 14,260
Other liabilities 37,028 37,817
Accrued employee and retiree benefits 28,276 27,715
Long-term debt 643,511 645,085
Shareholders' Equity:    
Common stock 5,396 5,396
Additional paid-in capital 112,389 115,941
Earnings reinvested in the business 1,740,500 1,726,872
Treasury stock, at cost (618,621) (622,768)
Accumulated other comprehensive loss (175,728) (172,117)
Total shareholders' equity 1,063,936 1,053,324
Total liabilities and shareholders' equity $ 2,005,682 $ 2,014,507
v3.24.1.u1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash flows from operating activities:    
Net earnings $ 30,940 $ 33,651
Adjustments to arrive at net cash provided by operating activities:    
Depreciation and amortization 14,709 14,150
Share-based compensation expense 1,995 2,267
Net (gain) loss on assets (193) 8
Portfolio Optimization Plan costs 1,189 0
Deferred income taxes (4) (2,351)
Changes in operating assets and liabilities:    
Trade accounts receivable (28,331) (7,142)
Inventories 26,624 (4,374)
Prepaid expenses and other assets (13,655) (2,062)
Accounts payable and other accrued expenses (21,993) (19,251)
Accrued salaries, wages, and withholdings from employees 29 (21,187)
Income taxes 3,150 2,548
Other liabilities 674 698
Net cash provided by (used in) operating activities 15,134 (3,045)
Cash flows from investing activities    
Acquisition of property, plant, and equipment (11,030) (22,278)
Proceeds from sale of assets 93 1
Other investing activities (1) (602)
Net cash used in investing activities (10,938) (22,879)
Cash flows from financing activities:    
Proceeds from additional borrowings 38,053 50,827
Debt payments (27,031) (1,351)
Dividends paid (17,312) (17,255)
Other financing activities (2,828) (7,669)
Net cash (used in) provided by financing activities (9,118) 24,552
Effect of exchange rate changes on cash and cash equivalents 1,405 4,468
Net (decrease) increase in cash and cash equivalents (3,517) 3,096
Cash and cash equivalents at beginning of period 28,934 20,921
Cash and cash equivalents at end of period $ 25,417 $ 24,017
v3.24.1.u1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-In Capital [Member]
Earnings Reinvested in the Business [Member]
Treasury Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
Beginning balance at Dec. 31, 2022 $ 5,396 $ 124,043 $ 1,702,700 $ (631,853) $ (200,688) $ 999,598
Beginning balance (in shares) at Dec. 31, 2022       12,058,773    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings 0 0 33,651 $ 0 0 33,651
Other comprehensive income (loss) 0 0 0 0 16,301 16,301
Cash dividends paid 0 0 (17,255) 0 0 (17,255)
Share-based compensation 0 2,267 0 0 0 2,267
Non-vested stock issued upon vesting 0 (11,956) 0 $ 11,956 0 0
Non-vested stock issued upon vesting (in shares)       (228,181)    
Benefit plans 0 375 0 $ 952 0 1,327
Benefit plans (in shares)       (18,172)    
Other 0 (2,140) 0 $ (5,528) 0 (7,668)
Other (in shares)       105,524    
Ending balance at Mar. 31, 2023 5,396 112,589 1,719,096 $ (624,473) (184,387) 1,028,221
Ending balance (in shares) at Mar. 31, 2023       11,917,944    
Beginning balance at Dec. 31, 2023 5,396 115,941 1,726,872 $ (622,768) (172,117) 1,053,324
Beginning balance (in shares) at Dec. 31, 2023       11,885,398    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings 0 0 30,940 $ 0 0 30,940
Other comprehensive income (loss) 0 0 0 0 (3,611) (3,611)
Cash dividends paid 0 0 (17,312) 0 0 (17,312)
Share-based compensation 0 1,995 0 0 0 1,995
Non-vested stock issued upon vesting 0 (5,365) 0 $ 5,365 0 0
Non-vested stock issued upon vesting (in shares)       (102,396)    
Benefit plans 0 299 0 $ 1,122 0 1,421
Benefit plans (in shares)       (21,405)    
Other 0 (481) 0 $ (2,340) 0 (2,821)
Other (in shares)       44,652    
Ending balance at Mar. 31, 2024 $ 5,396 $ 112,389 $ 1,740,500 $ (618,621) $ (175,728) $ 1,063,936
Ending balance (in shares) at Mar. 31, 2024       11,806,249    
v3.24.1.u1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract]    
Cash dividends per share (in dollars per share) $ 0.41 $ 0.41
v3.24.1.u1
Accounting Policies
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Accounting Policies
1.
Accounting Policies

In the opinion of Sensient Technologies Corporation (the Company), the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) that are necessary to present fairly the financial position of the Company as of March 31, 2024, and the results of operations, comprehensive income, cash flows, and shareholders’ equity for the three months ended March 31, 2024 and 2023. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Expenses are charged to operations in the period incurred.

Recently Issued Accounting Pronouncements

 In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to provide disclosures of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to consistently categorize, and provide greater disaggregation of, information in the rate reconciliation table and further disaggregate income tax payments by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

Please refer to the notes in the Company’s annual consolidated financial statements for the year ended December 31, 2023, for additional details of the Company’s financial condition and a description of the Company’s accounting policies, which have been continued without change.
v3.24.1.u1
Portfolio Optimization Plan
 3 Months Ended
Mar. 31, 2024
Portfolio Optimization Plan [Abstract]  
Portfolio Optimization Plan
2.
Portfolio Optimization Plan

During the fourth quarter of 2023, the board of directors of the Company approved a plan to undertake an effort to optimize certain production facilities and improve efficiencies within the Company (Portfolio Optimization Plan). As part of the Portfolio Optimization Plan, in the Flavors & Extracts segment, the Company began evaluating the potential closure of its manufacturing facility in Felinfach, Wales, United Kingdom, the potential closure of its sales office in Granada, Spain, and the potential centralization and elimination of certain selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. In addition, in the Color segment, the Company’s proposals include closing a manufacturing facility in Delta, British Columbia, Canada, closing a sales office in Argentina, and centralizing and eliminating certain production positions as well as potentially eliminating some selling and administrative positions, with such proposals remaining subject to information and consultation processes in certain countries. The Company reports all costs associated with the Portfolio Optimization Plan in the Corporate & Other segment.

The Company recorded non-cash impairment charges in Selling and Administrative Expenses, primarily related to certain property, plant, and equipment during the three months ended March 31, 2024, when the estimated fair value of these assets was lower than the carrying value. The property, plant, and equipment related to a product line that was shut down and determined to not be usable at other plant locations.

The Company recorded $3.4 million and $3.7 million of accrued liabilities in Other Accrued Expenses on the Company’s Consolidated Balance Sheet related to this plan as of March 31, 2024 and December 31, 2023, respectively. The Company expects this plan will cost approximately $40 million, primarily related to non-cash impairment charges and proposed employee separation costs, and upon completion would reduce annual operating costs by approximately $8 million to $10 million, with the full benefit expected to be achieved after 2025. The Company proposes to reduce headcount by approximately 120 positions, primarily in the Flavors & Extracts and Color segments, related to certain production and selling and administrative positions.

The following table summarizes the Portfolio Optimization Plan expenses by segment for the three months ended March 31, 2024:

 
(In thousands)
  
Flavors &
Extracts
    

Color
    
Corporate 
& Other
    
Consolidated
  
Non-cash impairment charges – Selling and administrative expenses
  
$
-
    
$
975
    
$
-
    
$
975
  
Non-cash charges – Cost of products sold
    
125
      
(18
)
    
-
      
107
  
Employee separation – Selling and administrative expenses
    
611
      
491
      
28
      
1,130
  
Other costs – Selling and administrative expenses(1)
    
316
      
284
      
-
      
600
  
Total
  
$
1,052
    
$
1,732
    
$
28
    
$
2,812
  


(1)
Other costs include professional services, accelerated depreciation, accelerated lease costs, and other related costs.
v3.24.1.u1
Trade Accounts Receivable
 3 Months Ended
Mar. 31, 2024
Trade Accounts Receivable [Abstract]  
Trade Accounts Receivable
3.
Trade Accounts Receivable

Trade accounts receivables are recorded at their face amount, less an allowance for expected losses on doubtful accounts. The allowance for doubtful accounts is calculated based on customer-specific analysis and an aging methodology using historical loss information. The Company believes historical loss information is a reasonable basis for expected credit losses as the Company’s historical credit loss experience correlates with its customer delinquency status. This information is also adjusted for any known current economic conditions. Forecasted economic conditions have not had a significant impact on the current credit loss estimate due to the short-term nature of the Company’s customer receivables; however, the Company will continue to monitor and evaluate the rapidly changing economic conditions. Additionally, as the Company only has one portfolio segment, there are not different risks between portfolios. Specific accounts are written off against the allowance for doubtful accounts when the receivable is deemed no longer collectible.
The following table summarizes the changes in the allowance for doubtful accounts during the three-month periods ended March 31, 2024 and 2023:
(In thousands)
Three Months Ended March 31, 2024
  
Allowance for
Doubtful Accounts
  
Balance at December 31, 2023
  
$
4,373
  
Provision for expected credit losses
    
307
  
Accounts written off
    
(747
)
Translation and other activity
    
(51
)
Balance at March 31, 2024
  
$
3,882
  

(In thousands)
Three Months Ended March 31, 2023
  
Allowance for
Doubtful Accounts
  
Balance at December 31, 2022
  
$
4,436
  
Provision for expected credit losses
    
120
  
Accounts written off
    
(614
)
Translation and other activity
    
103
  
Balance at March 31, 2023
  
$
4,045
  
v3.24.1.u1
Inventories
 3 Months Ended
Mar. 31, 2024
Inventories [Abstract]  
Inventories
4.
Inventories
 
At March 31, 2024, and December 31, 2023, inventories included finished and in-process products totaling $416.9 million and $437.1 million, respectively, and raw materials and supplies of $151.6 million and $161.3 million, respectively.
v3.24.1.u1
Fair Value
 3 Months Ended
Mar. 31, 2024
Fair Value [Abstract]  
Fair Value
5.
Fair Value

Accounting Standards Codification 820, Fair Value Measurement, defines fair value for financial assets and liabilities, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. The carrying values of the Company’s cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses, and short-term borrowings were approximately the same as the fair values as of March 31, 2024 and December 31, 2023. The net fair value of the forward exchange contracts based on current pricing obtained for comparable derivative products (Level 2 inputs) was an asset of $1.4 million and $1.0 million as of March 31, 2024 and December 31, 2023, respectively. The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2 inputs). The carrying value of the long-term debt at March 31, 2024 and December 31, 2023, was $643.6 million and $645.2 million, respectively. The fair value of the long-term debt at March 31, 2024 and December 31, 2023, was $648.6 million and $653.7 million, respectively.
v3.24.1.u1
Segment Information
 3 Months Ended
Mar. 31, 2024
Segment Information [Abstract]  
Segment Information
6.
Segment Information

The Company evaluates performance based on operating income before share-based compensation; restructuring and other charges, including Portfolio Optimization Plan costs; interest expense; and income taxes (segment operating income). Total revenue and segment operating income by business segment and geographic region include both sales to customers, as reported in the Company’s Consolidated Statements of Earnings, and intersegment sales, which are accounted for at prices that approximate market prices and are eliminated in consolidation.
The Company determines its operating segments based on information utilized by its chief operating decision maker to allocate resources and assess performance. The Company’s three reportable segments are the Flavors & Extracts and Color segments, which are both managed on a product line basis, and the Asia Pacific segment, which is managed on a geographic basis. The Company’s Flavors & Extracts segment produces flavor, extracts, and essential oils products that impart a desired taste, texture, aroma, or other characteristics to a broad range of consumer and other products. The Color segment produces natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, such as colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications. The Asia Pacific segment is managed on a geographic basis and produces and distributes color, flavor, and essential oils products in the Asia Pacific countries. The Company’s corporate expenses, share-based compensation, and restructuring and other charges, including Portfolio Optimization Plan costs, are included in the “Corporate & Other” category.
Operating results by segment for the periods presented are as follows:
(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia
Pacific
    
Corporate &
Other
    
Consolidated
  
Three months ended March 31, 2024:
                              
Revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
-
    
$
384,670
  
Intersegment revenue
    
5,070
      
3,661
      
22
      
-
      
8,753
  
Total revenue
  
$
193,092
    
$
160,025
    
$
40,306
    
$
-
    
$
393,423
  
                                         
Operating income (loss)
  
$
23,678
    
$
31,679
    
$
8,776
    
$
(14,727
)
  
$
49,406
  
Interest expense
    
-
      
-
      
-
      
7,045
      
7,045
  
Earnings (loss) before income taxes
  
$
23,678
    
$
31,679
    
$
8,776
    
$
(21,772
)
  
$
42,361
  
                                         
Three months ended March 31, 2023:
                                        
Revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
-
    
$
369,006
  
Intersegment revenue
    
6,880
      
4,212
      
-
      
-
      
11,092
  
Total revenue
  
$
178,852
    
$
161,161
    
$
40,085
    
$
-
    
$
380,098
  
                                         
Operating income (loss)
  
$
22,180
    
$
31,885
    
$
9,241
    
$
(12,468
)
  
$
50,838
  
Interest expense
    
-
      
-
      
-
      
6,002
      
6,002
  
Earnings (loss) before income taxes
  
$
22,180
    
$
31,885
    
$
9,241
    
$
(18,470
)
  
$
44,836
  

Product Lines
(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia Pacific
    
Consolidated
  
Three months ended March 31, 2024
                        
Flavors, Extracts & Flavor Ingredients
  
$
124,805
    
$
-
    
$
-
    
$
124,805
  
Natural Ingredients
    
68,287
      
-
      
-
      
68,287
  
Food & Pharmaceutical Colors
    
-
      
117,058
      
-
      
117,058
  
Personal Care
    
-
      
42,967
      
-
      
42,967
  
Asia Pacific
    
-
      
-
      
40,306
      
40,306
  
Intersegment Revenue
    
(5,070
)
    
(3,661
)
    
(22
)
    
(8,753
)
Total revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
384,670
  
                                 
Three months ended March 31, 2023:
                                
Flavors, Extracts & Flavor Ingredients
  
$
124,825
    
$
-
    
$
-
    
$
124,825
  
Natural Ingredients
    
54,027
      
-
      
-
      
54,027
  
Food & Pharmaceutical Colors
    
-
      
118,747
      
-
      
118,747
  
Personal Care
    
-
      
42,414
      
-
      
42,414
  
Asia Pacific
    
-
      
-
      
40,085
      
40,085
  
Intersegment Revenue
    
(6,880
)
     (4,212 )    
-
      
(11,092
)
Total revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
369,006
  

Geographic Markets
(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia Pacific
    
Consolidated
  
Three months ended March 31, 2024:
                        
North America
  
$
146,952
    
$
75,120
    
$
-
    
$
222,072
  
Europe
    
32,157
      
46,162
      
46
      
78,365
  
Asia Pacific
    
3,706
      
17,419
      
38,685
      
59,810
  
Other
    
5,207
      
17,663
      
1,553
      
24,423
  
Total revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
384,670
  
                                 
Three months ended March 31, 2023:
                                
North America
  
$
131,968
    
$
78,377
    
$
62
    
$
210,407
  
Europe
    
28,927
      
43,252
      
103
      
72,282
  
Asia Pacific
    
5,201
      
18,149
      
39,195
      
62,545
  
Other
    
5,876
      
17,171
      
725
      
23,772
  
Total revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
369,006
  
v3.24.1.u1
Retirement Plans
 3 Months Ended
Mar. 31, 2024
Retirement Plans [Abstract]  
Retirement Plans
7.
Retirement Plans

The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:

 
Three Months Ended
March 31,
  
(In thousands)
  
2024
    
2023
  
Service cost
  
$
372
    
$
368
  
Interest cost
     401       409  
Expected return on plan assets
    
(242
)
    
(239
)
Recognized actuarial gain
     (91 )     (139 )
Total defined benefit expense
  
$
440
    
$
399
  

The Company’s non-service cost portion of defined benefit expense is recorded in Interest Expense on the Company’s Consolidated Statements of Earnings. The Company’s service cost portion of defined benefit expense is recorded in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings.
v3.24.1.u1
Derivative Instruments and Hedging Activity
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activity [Abstract]  
Derivative Instruments and Hedging Activity
8.
Derivative Instruments and Hedging Activity

The Company may use forward exchange contracts and foreign currency denominated debt to manage its exposure to foreign exchange risk in order to reduce the effect of fluctuating foreign currencies on short-term foreign currency denominated intercompany transactions, non-functional currency raw material purchases, non-functional currency sales, and other known foreign currency exposures. These forward exchange contracts generally have maturities of less than 18 months. The Company’s primary hedging activities and their accounting treatment are summarized below.
Forward exchange contracts – Certain forward exchange contracts have been designated as cash flow hedges. The Company had $44.5 million and $58.4 million of forward exchange contracts designated as cash flow hedges outstanding as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024 and 2023, the amounts reclassified into net earnings in the Company’s Consolidated Statements of Earnings that offset the underlying transactions’ impact on earnings in the same period were not material. In addition, the Company utilizes forward exchange contracts that are not designated as cash flow hedges. The results of these transactions were not material to the financial statements.
Net investment hedges – The Company has designated certain foreign currency denominated long-term borrowings as partial hedges of the Company’s foreign currency net asset positions. As of March 31, 2024 and December 31, 2023, the total value of the Company’s net investment hedges was $306.7 million and $313.3 million, respectively. These net investment hedges included Euro and British Pound denominated long-term debt. Changes in the fair value of this debt attributable to changes in the spot foreign exchange rate are recorded in foreign currency translation in Other Comprehensive Income (OCI). For the three months ended March 31, 2024 and 2023, the impact of foreign exchange rates on these debt instruments decreased debt by $6.6 million and increased debt by $4.4 million, respectively, which has been recorded as foreign currency translation in OCI.
v3.24.1.u1
Income Taxes
 3 Months Ended
Mar. 31, 2024
Income Taxes [Abstract]  
Income Taxes
9.
Income Taxes

The effective income tax rates for the three months ended March 31, 2024 and 2023, were 27.0% and 24.9%, respectively. The effective tax rates for the three months ended March 31, 2024 and 2023 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings. The effective tax rate for the three months ended March 31, 2024, was also impacted by the limited tax deductibility of costs related to the Portfolio Optimization Plan.
v3.24.1.u1
Accumulated Other Comprehensive Income
 3 Months Ended
Mar. 31, 2024
Accumulated Other Comprehensive Income [Abstract]  
Accumulated Other Comprehensive Income
10.
Accumulated Other Comprehensive Income

The following table summarizes the changes in OCI during the three-month periods ended March 31, 2024 and 2023:
(In thousands)
  
Cash Flow
Hedges (1)
    
Pension
Items (1)
    
Foreign
Currency
Items
    
Total
  
Balances at December 31, 2023
  
$
997
    
$
(2,079
)
  
$
(171,035
)
  
$
(172,117
)
Other comprehensive income (loss) before reclassifications
    
702
      
-
      
(4,023
)
    
(3,321
)
Amounts reclassified from OCI
    
(222
)
    
(68
)
    
-
      
(290
)
Balances at March 31, 2024
  
$
1,477
    
$
(2,147
)
  
$
(175,058
)
  
$
(175,728
)

(In thousands)
  
Cash Flow
Hedges (1)
    
Pension
Items (1)
    
Foreign
Currency
Items
    
Total
  
Balances at December 31, 2022
  
$
(599
)
  
$
(1,792
)
  
$
(198,297
)
  
$
(200,688
)
Other comprehensive income before reclassifications
    
1,700
      
-
      
14,841
      
16,541
  
Amounts reclassified from OCI
    
(118
)
    
(122
)
    
-
      
(240
)
Balances at March 31, 2023
  
$
983
    
$
(1,914
)
  
$
(183,456
)
  
$
(184,387
)


(1)
Cash Flow Hedges and Pension Items are net of tax.
v3.24.1.u1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
11.
Commitments and Contingencies


The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.
v3.24.1.u1
Subsequent Event
 3 Months Ended
Mar. 31, 2024
Subsequent Event [Abstract]  
Subsequent Event
12.
Subsequent Event

On April 25, 2024, the Company announced its quarterly dividend of $0.41 per share would be payable on June 3, 2024.
v3.24.1.u1
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2024
Insider Trading Arrangements [Line Items]  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.u1
Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Accounting
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Expenses are charged to operations in the period incurred.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements

 In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to provide disclosures of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to consistently categorize, and provide greater disaggregation of, information in the rate reconciliation table and further disaggregate income tax payments by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements and its related disclosures.
v3.24.1.u1
Portfolio Optimization Plan (Tables)
 3 Months Ended
Mar. 31, 2024
Portfolio Optimization Plan [Abstract]  
Portfolio Optimization Plan Expenses by Segment
The following table summarizes the Portfolio Optimization Plan expenses by segment for the three months ended March 31, 2024:

 
(In thousands)
  
Flavors &
Extracts
    

Color
    
Corporate 
& Other
    
Consolidated
  
Non-cash impairment charges – Selling and administrative expenses
  
$
-
    
$
975
    
$
-
    
$
975
  
Non-cash charges – Cost of products sold
    
125
      
(18
)
    
-
      
107
  
Employee separation – Selling and administrative expenses
    
611
      
491
      
28
      
1,130
  
Other costs – Selling and administrative expenses(1)
    
316
      
284
      
-
      
600
  
Total
  
$
1,052
    
$
1,732
    
$
28
    
$
2,812
  


(1)
Other costs include professional services, accelerated depreciation, accelerated lease costs, and other related costs.
v3.24.1.u1
Trade Accounts Receivable (Tables)
 3 Months Ended
Mar. 31, 2024
Trade Accounts Receivable [Abstract]  
Changes in Allowance for Doubtful Accounts
The following table summarizes the changes in the allowance for doubtful accounts during the three-month periods ended March 31, 2024 and 2023:
(In thousands)
Three Months Ended March 31, 2024
  
Allowance for
Doubtful Accounts
  
Balance at December 31, 2023
  
$
4,373
  
Provision for expected credit losses
    
307
  
Accounts written off
    
(747
)
Translation and other activity
    
(51
)
Balance at March 31, 2024
  
$
3,882
  

(In thousands)
Three Months Ended March 31, 2023
  
Allowance for
Doubtful Accounts
  
Balance at December 31, 2022
  
$
4,436
  
Provision for expected credit losses
    
120
  
Accounts written off
    
(614
)
Translation and other activity
    
103
  
Balance at March 31, 2023
  
$
4,045
  
v3.24.1.u1
Segment Information (Tables)
 3 Months Ended
Mar. 31, 2024
Segment Information [Abstract]  
Operating Results by Segment
Operating results by segment for the periods presented are as follows:
(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia
Pacific
    
Corporate &
Other
    
Consolidated
  
Three months ended March 31, 2024:
                              
Revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
-
    
$
384,670
  
Intersegment revenue
    
5,070
      
3,661
      
22
      
-
      
8,753
  
Total revenue
  
$
193,092
    
$
160,025
    
$
40,306
    
$
-
    
$
393,423
  
                                         
Operating income (loss)
  
$
23,678
    
$
31,679
    
$
8,776
    
$
(14,727
)
  
$
49,406
  
Interest expense
    
-
      
-
      
-
      
7,045
      
7,045
  
Earnings (loss) before income taxes
  
$
23,678
    
$
31,679
    
$
8,776
    
$
(21,772
)
  
$
42,361
  
                                         
Three months ended March 31, 2023:
                                        
Revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
-
    
$
369,006
  
Intersegment revenue
    
6,880
      
4,212
      
-
      
-
      
11,092
  
Total revenue
  
$
178,852
    
$
161,161
    
$
40,085
    
$
-
    
$
380,098
  
                                         
Operating income (loss)
  
$
22,180
    
$
31,885
    
$
9,241
    
$
(12,468
)
  
$
50,838
  
Interest expense
    
-
      
-
      
-
      
6,002
      
6,002
  
Earnings (loss) before income taxes
  
$
22,180
    
$
31,885
    
$
9,241
    
$
(18,470
)
  
$
44,836
  
Product Lines
Product Lines
(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia Pacific
    
Consolidated
  
Three months ended March 31, 2024
                        
Flavors, Extracts & Flavor Ingredients
  
$
124,805
    
$
-
    
$
-
    
$
124,805
  
Natural Ingredients
    
68,287
      
-
      
-
      
68,287
  
Food & Pharmaceutical Colors
    
-
      
117,058
      
-
      
117,058
  
Personal Care
    
-
      
42,967
      
-
      
42,967
  
Asia Pacific
    
-
      
-
      
40,306
      
40,306
  
Intersegment Revenue
    
(5,070
)
    
(3,661
)
    
(22
)
    
(8,753
)
Total revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
384,670
  
                                 
Three months ended March 31, 2023:
                                
Flavors, Extracts & Flavor Ingredients
  
$
124,825
    
$
-
    
$
-
    
$
124,825
  
Natural Ingredients
    
54,027
      
-
      
-
      
54,027
  
Food & Pharmaceutical Colors
    
-
      
118,747
      
-
      
118,747
  
Personal Care
    
-
      
42,414
      
-
      
42,414
  
Asia Pacific
    
-
      
-
      
40,085
      
40,085
  
Intersegment Revenue
    
(6,880
)
     (4,212 )    
-
      
(11,092
)
Total revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
369,006
  

Geographical Markets
Geographic Markets
(In thousands)
  
Flavors &
Extracts
    
Color
    
Asia Pacific
    
Consolidated
  
Three months ended March 31, 2024:
                        
North America
  
$
146,952
    
$
75,120
    
$
-
    
$
222,072
  
Europe
    
32,157
      
46,162
      
46
      
78,365
  
Asia Pacific
    
3,706
      
17,419
      
38,685
      
59,810
  
Other
    
5,207
      
17,663
      
1,553
      
24,423
  
Total revenue from external customers
  
$
188,022
    
$
156,364
    
$
40,284
    
$
384,670
  
                                 
Three months ended March 31, 2023:
                                
North America
  
$
131,968
    
$
78,377
    
$
62
    
$
210,407
  
Europe
    
28,927
      
43,252
      
103
      
72,282
  
Asia Pacific
    
5,201
      
18,149
      
39,195
      
62,545
  
Other
    
5,876
      
17,171
      
725
      
23,772
  
Total revenue from external customers
  
$
171,972
    
$
156,949
    
$
40,085
    
$
369,006
  
v3.24.1.u1
Retirement Plans (Tables)
 3 Months Ended
Mar. 31, 2024
Retirement Plans [Abstract]  
Annual Benefit Cost
The Company’s components of annual benefit cost for the defined benefit plans for the periods presented are as follows:

 
Three Months Ended
March 31,
  
(In thousands)
  
2024
    
2023
  
Service cost
  
$
372
    
$
368
  
Interest cost
     401       409  
Expected return on plan assets
    
(242
)
    
(239
)
Recognized actuarial gain
     (91 )     (139 )
Total defined benefit expense
  
$
440
    
$
399
  
v3.24.1.u1
Accumulated Other Comprehensive Income (Tables)
 3 Months Ended
Mar. 31, 2024
Accumulated Other Comprehensive Income [Abstract]  
Changes in OCI
The following table summarizes the changes in OCI during the three-month periods ended March 31, 2024 and 2023:
(In thousands)
  
Cash Flow
Hedges (1)
    
Pension
Items (1)
    
Foreign
Currency
Items
    
Total
  
Balances at December 31, 2023
  
$
997
    
$
(2,079
)
  
$
(171,035
)
  
$
(172,117
)
Other comprehensive income (loss) before reclassifications
    
702
      
-
      
(4,023
)
    
(3,321
)
Amounts reclassified from OCI
    
(222
)
    
(68
)
    
-
      
(290
)
Balances at March 31, 2024
  
$
1,477
    
$
(2,147
)
  
$
(175,058
)
  
$
(175,728
)

(In thousands)
  
Cash Flow
Hedges (1)
    
Pension
Items (1)
    
Foreign
Currency
Items
    
Total
  
Balances at December 31, 2022
  
$
(599
)
  
$
(1,792
)
  
$
(198,297
)
  
$
(200,688
)
Other comprehensive income before reclassifications
    
1,700
      
-
      
14,841
      
16,541
  
Amounts reclassified from OCI
    
(118
)
    
(122
)
    
-
      
(240
)
Balances at March 31, 2023
  
$
983
    
$
(1,914
)
  
$
(183,456
)
  
$
(184,387
)


(1)
Cash Flow Hedges and Pension Items are net of tax.
v3.24.1.u1
Portfolio Optimization Plan (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
USD ($)
Positions
Dec. 31, 2023
USD ($)
Portfolio Optimization Plan [Abstract]    
Accrued liabilities related to portfolio optimization plan $ 3,400 $ 3,700
Expected plan cost $ 40,000  
Number of reduced positions | Positions 120  
Portfolio Optimization Plan Expenses [Abstract]    
Portfolio optimization plan expenses $ 2,812  
Minimum [Member]    
Portfolio Optimization Plan [Abstract]    
Reduction of annual operating costs 8,000  
Maximum [Member]    
Portfolio Optimization Plan [Abstract]    
Reduction of annual operating costs 10,000  
Selling and Administrative Expenses [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges 975  
Employee separation 1,130  
Other costs [1] 600  
Cost of Products Sold [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges 107  
Flavors & Extracts [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Portfolio optimization plan expenses 1,052  
Flavors & Extracts [Member] | Selling and Administrative Expenses [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges 0  
Employee separation 611  
Other costs [1] 316  
Flavors & Extracts [Member] | Cost of Products Sold [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges 125  
Color [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Portfolio optimization plan expenses 1,732  
Color [Member] | Selling and Administrative Expenses [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges 975  
Employee separation 491  
Other costs [1] 284  
Color [Member] | Cost of Products Sold [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges (18)  
Corporate & Other [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Portfolio optimization plan expenses 28  
Corporate & Other [Member] | Selling and Administrative Expenses [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges 0  
Employee separation 28  
Other costs [1] 0  
Corporate & Other [Member] | Cost of Products Sold [Member]    
Portfolio Optimization Plan Expenses [Abstract]    
Non-cash impairment charges $ 0  
[1] Other costs include professional services, accelerated depreciation, accelerated lease costs, and other related costs.
v3.24.1.u1
Trade Accounts Receivable (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
USD ($)
Segment
Mar. 31, 2023
USD ($)
Trade Accounts Receivable [Abstract]    
Number of portfolio segments | Segment 1  
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance $ 4,373 $ 4,436
Provision for expected credit losses 307 120
Accounts written off (747) (614)
Translation and other activity (51) 103
Ending balance $ 3,882 $ 4,045
v3.24.1.u1
Inventories (Details) - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Inventories [Abstract]    
Finished and in-process products $ 416.9 $ 437.1
Raw materials and supplies $ 151.6 $ 161.3
v3.24.1.u1
Fair Value (Details) - Level 2 [Member] - USD ($)
$ in Millions
Mar. 31, 2024
Dec. 31, 2023
Investments, Fair Value Disclosure [Abstract]    
Forward exchange contract, asset $ 1.4 $ 1.0
Carrying Value [Member]    
Investments, Fair Value Disclosure [Abstract]    
Long term debt 643.6 645.2
Fair Value [Member]    
Investments, Fair Value Disclosure [Abstract]    
Long term debt $ 648.6 $ 653.7
v3.24.1.u1
Segment Information, Operating Results by Segment (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
USD ($)
Segment
Mar. 31, 2023
USD ($)
Segment Information [Abstract]    
Number of reportable segments | Segment 3  
Revenue [Abstract]    
Revenue $ 384,670 $ 369,006
Operating income (loss) 49,406 50,838
Interest expense 7,045 6,002
Earnings before income taxes 42,361 44,836
Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 188,022 171,972
Operating income (loss) 23,678 22,180
Interest expense 0 0
Earnings before income taxes 23,678 22,180
Color [Member]    
Revenue [Abstract]    
Revenue 156,364 156,949
Operating income (loss) 31,679 31,885
Interest expense 0 0
Earnings before income taxes 31,679 31,885
Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 40,284 40,085
Operating income (loss) 8,776 9,241
Interest expense 0 0
Earnings before income taxes 8,776 9,241
Reportable Segments [Member]    
Revenue [Abstract]    
Revenue 393,423 380,098
Reportable Segments [Member] | Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 193,092 178,852
Reportable Segments [Member] | Color [Member]    
Revenue [Abstract]    
Revenue 160,025 161,161
Reportable Segments [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 40,306 40,085
Intersegment Revenue [Member]    
Revenue [Abstract]    
Revenue 8,753 11,092
Intersegment Revenue [Member] | Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 5,070 6,880
Intersegment Revenue [Member] | Color [Member]    
Revenue [Abstract]    
Revenue 3,661 4,212
Intersegment Revenue [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 22 0
Corporate & Other [Member] | Corporate and Other [Member]    
Revenue [Abstract]    
Revenue 0 0
Operating income (loss) (14,727) (12,468)
Interest expense 7,045 6,002
Earnings before income taxes $ (21,772) $ (18,470)
v3.24.1.u1
Segment Information, Revenue from External Customers by Product Line (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue [Abstract]    
Revenue $ 384,670 $ 369,006
Flavors, Extracts & Flavor Ingredients [Member]    
Revenue [Abstract]    
Revenue 124,805 124,825
Natural Ingredients [Member]    
Revenue [Abstract]    
Revenue 68,287 54,027
Food & Pharmaceutical Colors [Member]    
Revenue [Abstract]    
Revenue 117,058 118,747
Personal Care [Member]    
Revenue [Abstract]    
Revenue 42,967 42,414
Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 188,022 171,972
Flavors & Extracts [Member] | Flavors, Extracts & Flavor Ingredients [Member]    
Revenue [Abstract]    
Revenue 124,805 124,825
Flavors & Extracts [Member] | Natural Ingredients [Member]    
Revenue [Abstract]    
Revenue 68,287 54,027
Flavors & Extracts [Member] | Food & Pharmaceutical Colors [Member]    
Revenue [Abstract]    
Revenue 0 0
Flavors & Extracts [Member] | Personal Care [Member]    
Revenue [Abstract]    
Revenue 0 0
Color [Member]    
Revenue [Abstract]    
Revenue 156,364 156,949
Color [Member] | Flavors, Extracts & Flavor Ingredients [Member]    
Revenue [Abstract]    
Revenue 0 0
Color [Member] | Natural Ingredients [Member]    
Revenue [Abstract]    
Revenue 0 0
Color [Member] | Food & Pharmaceutical Colors [Member]    
Revenue [Abstract]    
Revenue 117,058 118,747
Color [Member] | Personal Care [Member]    
Revenue [Abstract]    
Revenue 42,967 42,414
Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 40,284 40,085
Asia Pacific [Member] | Flavors, Extracts & Flavor Ingredients [Member]    
Revenue [Abstract]    
Revenue 0 0
Asia Pacific [Member] | Natural Ingredients [Member]    
Revenue [Abstract]    
Revenue 0 0
Asia Pacific [Member] | Food & Pharmaceutical Colors [Member]    
Revenue [Abstract]    
Revenue 0 0
Asia Pacific [Member] | Personal Care [Member]    
Revenue [Abstract]    
Revenue 0 0
Reportable Segments [Member]    
Revenue [Abstract]    
Revenue 393,423 380,098
Reportable Segments [Member] | Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 193,092 178,852
Reportable Segments [Member] | Color [Member]    
Revenue [Abstract]    
Revenue 160,025 161,161
Reportable Segments [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 40,306 40,085
Intersegment Revenue [Member]    
Revenue [Abstract]    
Revenue 8,753 11,092
Intersegment Revenue [Member] | Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 5,070 6,880
Intersegment Revenue [Member] | Color [Member]    
Revenue [Abstract]    
Revenue 3,661 4,212
Intersegment Revenue [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue $ 22 $ 0
v3.24.1.u1
Segment Information, Revenue from External Customers by Geographic Markets (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue [Abstract]    
Revenue $ 384,670 $ 369,006
North America [Member]    
Revenue [Abstract]    
Revenue 222,072 210,407
Europe [Member]    
Revenue [Abstract]    
Revenue 78,365 72,282
Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 59,810 62,545
Other [Member]    
Revenue [Abstract]    
Revenue 24,423 23,772
Flavors & Extracts [Member]    
Revenue [Abstract]    
Revenue 188,022 171,972
Color [Member]    
Revenue [Abstract]    
Revenue 156,364 156,949
Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 40,284 40,085
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | North America [Member]    
Revenue [Abstract]    
Revenue 146,952 131,968
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Europe [Member]    
Revenue [Abstract]    
Revenue 32,157 28,927
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 3,706 5,201
Reportable Geographical Components [Member] | Flavors & Extracts [Member] | Other [Member]    
Revenue [Abstract]    
Revenue 5,207 5,876
Reportable Geographical Components [Member] | Color [Member] | North America [Member]    
Revenue [Abstract]    
Revenue 75,120 78,377
Reportable Geographical Components [Member] | Color [Member] | Europe [Member]    
Revenue [Abstract]    
Revenue 46,162 43,252
Reportable Geographical Components [Member] | Color [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 17,419 18,149
Reportable Geographical Components [Member] | Color [Member] | Other [Member]    
Revenue [Abstract]    
Revenue 17,663 17,171
Reportable Geographical Components [Member] | Asia Pacific [Member] | North America [Member]    
Revenue [Abstract]    
Revenue 0 62
Reportable Geographical Components [Member] | Asia Pacific [Member] | Europe [Member]    
Revenue [Abstract]    
Revenue 46 103
Reportable Geographical Components [Member] | Asia Pacific [Member] | Asia Pacific [Member]    
Revenue [Abstract]    
Revenue 38,685 39,195
Reportable Geographical Components [Member] | Asia Pacific [Member] | Other [Member]    
Revenue [Abstract]    
Revenue $ 1,553 $ 725
v3.24.1.u1
Retirement Plans (Details) - Defined Benefit Plan [Member] - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]    
Service cost $ 372 $ 368
Interest cost 401 409
Expected return on plan assets (242) (239)
Recognized actuarial gain (91) (139)
Total defined benefit expense $ 440 $ 399
v3.24.1.u1
Derivative Instruments and Hedging Activity (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Maximum [Member]      
Derivative Instruments and Hedging Activity for the Period [Abstract]      
Number of months for contracts to mature 18 months    
Forward Exchange Contracts [Member] | Cash Flow Hedges [Member]      
Derivative Instruments and Hedging Activity for the Period [Abstract]      
Derivative, fair value $ 44.5   $ 58.4
Foreign Currency Denominated Debt, Net Investment Hedging [Member]      
Derivative Instruments and Hedging Activity for the Period [Abstract]      
Carrying value of foreign denominated debt 306.7   $ 313.3
Impact of foreign exchange rates on debt instruments recorded in other comprehensive income $ (6.6) $ 4.4  
v3.24.1.u1
Income Taxes (Details)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Taxes [Abstract]    
Effective income tax rates 27.00% 24.90%
v3.24.1.u1
Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Beginning balance $ 1,053,324 $ 999,598
Other comprehensive income (loss) before reclassifications (3,321) 16,541
Amounts reclassified from OCI (290) (240)
Ending balance 1,063,936 1,028,221
Accumulated Other Comprehensive (Loss) Income [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Beginning balance (172,117) (200,688)
Ending balance (175,728) (184,387)
Cash Flow Hedges [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Beginning balance [1] 997 (599)
Other comprehensive income (loss) before reclassifications [1] 702 1,700
Amounts reclassified from OCI [1] (222) (118)
Ending balance [1] 1,477 983
Pension Items [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Beginning balance [1] (2,079) (1,792)
Other comprehensive income (loss) before reclassifications [1] 0 0
Amounts reclassified from OCI [1] (68) (122)
Ending balance [1] (2,147) (1,914)
Foreign Currency Items [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Beginning balance (171,035) (198,297)
Other comprehensive income (loss) before reclassifications (4,023) 14,841
Amounts reclassified from OCI 0 0
Ending balance $ (175,058) $ (183,456)
[1] Cash Flow Hedges and Pension Items are net of tax.
v3.24.1.u1
Subsequent Event (Details) - Subsequent Event [Member]
Apr. 25, 2024
$ / shares
Subsequent Events [Abstract]  
Dividend declared date Apr. 25, 2024
Dividend payable (in dollars per share) $ 0.41
Dividend payable date Jun. 03, 2024
Sensient Technologies (NYSE:SXT)
Historical Stock Chart
Von Apr 2024 bis Mai 2024 Click Here for more Sensient Technologies Charts.
Sensient Technologies (NYSE:SXT)
Historical Stock Chart
Von Mai 2023 bis Mai 2024 Click Here for more Sensient Technologies Charts.