SENSIENT TECHNOLOGIES CORP

Previous wording

The Company’s gross margin was 34.3% and 33.2% for the three months ended September 30, 2025 and 2024, respectively. The Company’s gross margin was 34.1% and 32.8% for the nine months ended September 30, 2025 and 2024, respectively. For the three and nine months ended September 30, 2025, Portfolio Optimization Plan costs totaling $0.6 million and $4.3 million, respectively, decreased gross margin by 20 and 40 basis points, respectively. Portfolio Optimization Plan costs for the three and nine months ended September 30, 2024 had an immaterial impact on gross margin. See Portfolio Optimization Plan below for further information. The Company’s gross margins for the three and nine months ended September 30, 2025 were further impacted by the favorable pricing, partially offset by higher raw material costs.

Current wording

The Company’s gross margin was 35.0% and 33.6% for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2025, Portfolio Optimization Plan costs totaling $1.8 million decreased gross margin by 50 basis points. See Portfolio Optimization Plan below for further information. The Company’s gross margin was further impacted by the favorable pricing and higher volumes, partially offset by higher raw material costs.

Previous wording

Selling and administrative expense as a percent of revenue was 20.3% for each of the three months ended September 30, 2025 and 2024. Selling and administrative expense as a percent of revenue was 20.3% and 20.2% for the nine months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025 and 2024, selling and administrative expenses were increased by Portfolio Optimization Plan costs totaling $2.7 and $1.0 million, respectively, which increased selling and administrative expenses as a percent of revenue by approximately 70 and 20 basis points, respectively. For each of the nine months ended September 30, 2025 and 2024, selling and administrative expenses were increased by Portfolio Optimization Plan costs totaling $5.3 million, which increased selling and administrative expenses as a percent of revenue by approximately 50 basis points. See Portfolio Optimization Plan below for further information. The remaining increase, excluding the Portfolio Optimization Plan costs, in selling and administrative expense as a percent of revenue for the three and nine months ended September 30, 2025 was primarily due to higher performance-based executive compensation costs incurred in 2025.

Current wording

Selling and administrative expense as a percent of revenue was 19.7% and 19.9% for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026, selling and administrative expenses were decreased by $0.4 million, or approximately 10 basis points as a percent of revenue, from the gain on the sale of the Felinfach land and building assets. For the three months ended March 31, 2025, selling and administrative expenses were increased by Portfolio Optimization Plan costs totaling $1.1 million, which increased selling and administrative expenses as a percent of revenue by approximately 20 basis points. See Portfolio Optimization Plan below for further information.

Previous wording

Operating income was $57.7 million and $50.5 million for the three months ended September 30, 2025 and 2024, respectively. Operating margins were 14.0% and 12.9% for the three months ended September 30, 2025 and 2024, respectively. Portfolio Optimization Plan costs decreased operating margins by approximately 80 and 30 basis points for the three months ended September 30, 2025 and 2024, respectively. The increase in operating margin was primarily due to the higher selling prices, partially offset by higher raw material costs and higher performance-based executive compensation costs incurred in 2025.

Current wording

Operating income was $66.7 million and $53.5 million for the three months ended March 31, 2026 and 2025, respectively. Operating margins were 15.3% and 13.6% for the three months ended March 31, 2026 and 2025, respectively. Portfolio Optimization Plan costs decreased operating margins by approximately 80 basis points for the three months ended March 31, 2025. The increase in operating margin was primarily due to favorable pricing and higher volumes, partially offset by higher raw material costs and higher performance-based executive compensation costs incurred in 2026.

Previous wording

The effective income tax rates for the three months ended September 30, 2025 and 2024, were 26.6% and 23.7%, respectively. For the nine months ended September 30, 2025 and 2024, the effective income tax rates were 25.8% and 25.7%, respectively. The effective tax rates for the three and nine months ended September 30, 2025 and 2024 were both impacted by the mix of foreign earnings, changes in estimates associated with the finalization of prior year foreign tax items, and the limited tax deductibility of costs related to the Portfolio Optimization Plan.

Current wording

The effective income tax rates for the three months ended March 31, 2026 and 2025 were 24.9% and 25.4%, respectively. The effective tax rates for the three months ended March 31, 2026 and 2025 were both impacted by changes in estimates associated with the finalization of prior year foreign tax items and the mix of foreign earnings.

Previous wording

The Company’s Felinfach site was shut down in May 2025, and all production activities have been transferred to other locations. The Company began marketing the Felinfach site for sale in June 2025. The Company has substantially completed all other actions contemplated under the Portfolio Optimization Plan in accordance with local laws.

Current wording

The Company’s Felinfach site was shut down in May 2025, and all production activities have been transferred to other locations. The Company began marketing the Felinfach site for sale in June 2025. As a result, the Company met all of the assets held for sale criteria for the Felinfach land and building assets in June 2025, which have been recorded as the only balance in Fixed assets held for sale on the Company’s Consolidated Balance Sheet at December 31, 2025. The Company sold the land and building assets in February 2026 for approximately $2.0 million, resulting in a $0.4 million gain recognized in Selling and Administrative Expenses on the Company’s Consolidated Statements of Earnings. The Company has completed all actions contemplated under the Portfolio Optimization Plan.

Previous wording

For the three and nine months ended September 30, 2025, the Company incurred costs of $3.3 million and $9.5 million, respectively, related to the Portfolio Optimization Plan recorded in Corporate & Other, primarily for dual plant operating costs, professional services, non-cash inventory charges, decommissioning costs, and employee separation costs. For the three and nine months ended September 30, 2024, the Company incurred costs of $1.2 million and $5.8 million, respectively, related to the Portfolio Optimization Plan recorded in Corporate & Other, primarily for costs associated with employee separation, decommissioning, impairment of fixed assets, and professional services.

Current wording

For the three months ended March 31, 2025, the Company incurred costs of $2.9 million related to the Portfolio Optimization Plan recorded in Corporate & Other, primarily for dual plant operating costs, non-cash inventory charges, professional services, and employee separation costs. The Company did not incur any costs related to the Portfolio Optimization Plan for the three months ended March 31, 2026.

Previous wording

Portfolio Optimization Plan costs are discussed under “Portfolio Optimization Plan” above and Note 3, Portfolio Optimization Plan, in the Notes to the Consolidated Financial Statements included in this report.

Current wording

(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 3, 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.

Previous wording

The following table summarizes the percentage change for the results of the three and nine months ended September 30, 2025, compared to the results for the three and nine months ended September 30, 2024, in the respective financial measures.

Current wording

The following table summarizes the percentage change for the results of the three months ended March 31, 2026, compared to the results for the three months ended March 31, 2025, in the respective financial measures.

Previous wording

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 (except for share-based compensation expense associated with stock grants to certain business unit leaders); restructuring and other costs, including the Portfolio Optimization Plan costs (which are reported in Corporate & Other); interest expense; and income taxes.

Current wording

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 (except for share-based compensation expense associated with stock grants to certain business unit leaders), restructuring and other costs, including the Portfolio Optimization Plan costs, and other costs (which are reported in Corporate & Other), interest expense, and income taxes.

Previous wording

Flavors & Extracts segment operating income was $28.0 million and $25.9 million for the three months ended September 30, 2025 and 2024, respectively, an increase of approximately 8%. The higher segment operating income was a result of higher operating income in Flavors, Extracts & Flavor Ingredients, partially offset by lower operating income in Agricultural Ingredients. The higher segment operating income in Flavors, Extracts & Flavor Ingredients was primarily due to higher selling prices and volumes. The lower segment operating income in Agricultural Ingredients was primarily due to higher raw material costs and lower volumes, partially offset by higher selling prices. Segment operating income as a percent of revenue was 13.8% in the current quarter compared to 12.7% in the prior year’s comparable quarter. Foreign exchange rates increased segment operating income by approximately 1% for the three months ended September 30, 2025.

Current wording

Flavors & Extracts segment operating income was $26.8 million and $25.0 million for the three months ended March 31, 2026 and 2025, respectively, an increase of approximately 7%. The higher segment operating income was primarily a result of higher operating income in Flavors, Extracts & Flavor Ingredients, primarily due to higher selling prices and volumes, partially offset by higher manufacturing and other costs. Foreign exchange rates increased segment operating income by approximately 2%. Segment operating income as a percent of revenue was 13.3% in the current quarter compared to 12.9% in the prior year’s comparable quarter.

Previous wording

Segment revenue for the Color segment was $178.2 million and $162.1 million for the three months ended September 30, 2025 and 2024, respectively, an increase of approximately 10%. The increase was a result of higher revenue in Food & Pharmaceutical Colors and Personal Care. The higher revenue in Food & Pharmaceutical Colors was due to higher volumes and selling prices and the favorable impact of foreign exchange rates. The higher revenue in Personal Care was primarily due to the favorable impact of foreign exchange rates, partially offset by lower volumes. Foreign exchange rates increased segment revenue by approximately 2% for the three months ended September 30, 2025.

Current wording

Color segment revenue was $198.2 million and $167.8 million for the three months ended March 31, 2026 and 2025, respectively, an increase of approximately 18%. The increase was a result of higher revenue in Food & Pharmaceutical Colors and Personal Care. The higher revenue in Food & Pharmaceutical Colors was due to higher volumes, including higher volumes associated with natural colors conversion activity, higher selling prices, and the favorable impact of foreign exchange rates. The higher revenue in Personal Care was primarily due to the favorable impact of foreign exchange rates and higher selling prices. Foreign exchange rates increased segment revenue by approximately 6%.

Previous wording

Segment operating income for the Asia Pacific segment was $27.9 million and $26.0 million for the nine months ended September 30, 2025 and 2024, respectively, an increase of approximately 8%. The increase was primarily a result of higher selling prices and volumes and the favorable impact of foreign exchange rates that increased segment operating income by approximately 3%, partially offset by higher raw material and manufacturing and other costs. Segment operating income as a percent of revenue was 22.0% in the current nine month period and 21.5% in the prior year’s comparable period.

Current wording

Asia Pacific segment revenue was $45.3 million and $41.9 million for the three months ended March 31, 2026 and 2025, respectively, an increase of approximately 8%. The increase was due to higher selling prices and volumes and the favorable impact of foreign exchange rates that increased segment revenue by approximately 3%.

Previous wording

The Corporate & Other operating expense was $17.6 million and $14.5 million for the three months ended September 30, 2025 and 2024, respectively. For the three months ended September 30, 2025 and 2024, Corporate & Other operating expenses were increased by Portfolio Optimization Plan costs totaling $3.3 million and $1.2 million, respectively. See the Portfolio Optimization Plan section above for further information. The remaining increase in Corporate & Other operating expenses was primarily due to higher performance-based executive compensation costs incurred in 2025.

Current wording

The Corporate & Other operating expense was $13.3 million and $15.8 million for the three months ended March 31, 2026 and 2025, respectively. The lower operating expense was primarily due to Portfolio Optimization Plan costs totaling $2.9 million in the three months ended March 31, 2025. See the Portfolio Optimization Plan section above for further information.

Previous wording

The Company’s financial position remains strong. The Company is in compliance with its loan covenants calculated in accordance with applicable agreements as of September 30, 2025. 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 2025 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 2030.

Current wording

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, 2026. The Company expects to increase its existing indebtedness in the short-term to further support the increased cash requirements for operations and capital expenditures associated with the natural colors conversion activity. In the long-term, the Company anticipates that its cash flow from operations and 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 2026 through 2030. 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 2030.

Previous wording

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 or nine months ended September 30, 2025. The Company has experienced increased costs for certain inputs, such as raw materials, shipping and logistics, and labor. 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.

Current wording

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, 2026. The Company has experienced increased costs for certain inputs, such as raw materials, energy, shipping and logistics, packaging, and labor-related costs. We continue to expect to manage these impacts in the near term, but persistent, accelerated, or expanded inflationary conditions, including any heightened inflationary pressures resulting from the conflict between the United States and Iran, could exacerbate these challenges and impact our profitability.

Previous wording

The United States has recently implemented significant tariffs on imports from a wide range of countries and has announced the possibility of implementing additional, or increasing current, tariffs. These actions, and retaliatory tariffs imposed by other countries on United States exports, have led to significant volatility and uncertainty in global markets. The Company anticipates incurring incremental tariff costs on certain raw materials to produce our products and certain finished goods shipped to customers. However, the Company expects to manage the impact of the increased tariff costs through pricing actions. To the extent the Company is unable to offset the increased tariff costs, or the tariffs negatively impact demand, the Company’s revenue and profitability would be adversely impacted. If additional tariffs are adopted, the Company would incur additional tariff costs that could be material.

Current wording

The United States implemented significant tariffs on imports from a wide range of countries in 2025. On February 20, 2026, the Supreme Court of the United States ruled the tariffs imposed by the United States in reliance on the International Emergency Economic Powers Act during 2025 were unconstitutional. On the same day, the Trump administration temporarily imposed 10% tariffs on imports from all countries for 150 days. On February 21, 2026, the Trump administration announced the tariff rate will be increased to 15%. These actions, and retaliatory tariffs imposed by other countries on United States exports, have led to significant volatility and uncertainty in global markets. The Company anticipates incurring incremental tariff costs on certain raw materials to produce our products and certain finished goods shipped to customers. However, the Company expects to manage the impact of the increased tariff costs through pricing actions. To the extent the Company is unable to offset the increased tariff costs, or the tariffs negatively impact demand, or other trade barriers are implemented, the Company’s revenue and profitability would be adversely impacted. If additional tariffs are adopted, the Company would incur additional tariff costs that could be material.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes a broad range of tax reform provisions, such as the extension of certain expiring provisions, modifications to the international tax framework, and the continuation of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. These provisions did not have a material impact on our effective tax rate for the three or nine months ended September 30, 2025. We will continue to assess the OBBBA tax provisions and their impacts on our consolidated financial statements.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes a broad range of tax reform provisions, such as the extension of certain expiring provisions, modifications to the international tax framework, and the continuation of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions implemented through 2027. These provisions did not have a material impact on our effective tax rate for the three months ended March 31, 2026. We will continue to assess the OBBBA tax provisions and their impacts on our consolidated financial statements.

Previous wording

Net cash provided by operating activities was $83.3 million and $135.8 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease in net cash provided by operating activities was primarily due to an increase in cash used by inventory during 2025 compared to 2024 and an increase in cash used for performance-based compensation payments (which are determined based on prior year performance) made during 2025 compared to 2024, partially offset by an increase in cash provided by accounts receivable.

Current wording

Net cash used in operating activities was $13.6 million and $9.0 million for the three months ended March 31, 2026 and 2025, respectively. The increase in net cash used in operating activities was primarily due to an increase in cash used by inventory during 2026 compared to 2025 and a decrease in cash provided by accounts receivable.

Previous wording

Net cash used in investing activities was $61.0 million and $37.2 million during the nine months ended September 30, 2025 and 2024, respectively. Capital expenditures were $57.8 million and $36.1 million during the nine months ended September 30, 2025 and 2024, respectively. In 2025, the Company paid $4.9 million for the acquisition of Biolie SAS.

Current wording

Net cash used in investing activities was $26.9 million and $21.3 million during the three months ended March 31, 2026 and 2025, respectively. Capital expenditures were $28.7 million and $16.9 million during the three months ended March 31, 2026 and 2025, respectively. The Company received $2.0 million for the sale of the Felinfach land and building assets during the three months ended March 31, 2026. The Company paid $4.3 million for the acquisition of Biolie SAS during the three months ended March 31, 2025.

Previous wording

Net cash used in financing activities was $13.9 million and $75.1 million for the nine months ended September 30, 2025 and 2024, respectively. Net debt increased by $41.0 million and decreased by $19.8 million for the nine months ended September 30, 2025 and 2024, respectively. The cash proceeds from the increase in net debt in the current period were primarily used to support capital expenditure investments during the nine months ended September 30, 2025. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of $52.2 million and $52.0 million were paid during the nine months ended September 30, 2025 and 2024, respectively. Total dividends of $1.23 per share were paid for both the nine months ended September 30, 2025 and 2024.

Current wording

Net cash provided by financing activities was $42.4 million and $36.0 million for the three months ended March 31, 2026 and 2025, respectively. Net debt increased by $63.3 million and $55.7 million for the three months ended March 31, 2026 and 2025, respectively. For purposes of the cash flow statement, net changes in debt exclude the impact of foreign exchange rates. Dividends of $17.4 million were paid during both the three months ended March 31, 2026 and 2025. Dividends paid per share were $0.41 for both the three months ended March 31, 2026 and 2025.