Sensient Technologies Corporation Reports Results for the Quarter Ended September 30, 2020

Flavors & Extracts Group reports Strong Revenue and Profit Growth

Growth in Food and Pharmaceutical Color Sales was offset by Lower Personal Care Revenue

MILWAUKEE–(BUSINESS WIRE)–Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $323.6 million in this year’s third quarter compared to $317.7 million in last year’s third quarter. Reported operating income in the third quarter was $41.2 million compared to $38.8 million in the third quarter of 2019. Reported diluted earnings per share was 78 cents in the third quarter of 2020 compared to diluted earnings per share of 75 cents in the third quarter of 2019. Foreign currency translation had an immaterial impact on revenue, operating income, and earnings per share in the quarter.

The 2020 third quarter reported results include divestiture & other related costs as well as operational improvement plan costs, which decreased third quarter net earnings by $1.4 million ($0.03 per diluted share). The 2020 and 2019 third quarter results also include the operations of the product lines divested and to be divested, which increased diluted earnings per share by $0.04 in the third quarter of 2020 and $0.02 in the third quarter of 2019. These adjustments are described in more detail under “Reconciliation of Non-GAAP Amounts” at the end of this release.

BUSINESS REVIEW

Reported

Revenue

Quarter

Year-to-date

Flavors & Extracts

9.1%

 

4.1%

Color

-8.3%

 

-7.0%

Asia Pacific

2.0%

 

1.6%

Total Revenue

1.9%

 

-0.7%

 

 

 

Adjusted

Local Currency (1)

Revenue

Quarter

 

Year-to-date

Flavors & Extracts

12.9%

 

7.2%

Color

-1.5%

 

-1.2%

Asia Pacific

2.1%

 

3.0%

Total Revenue

6.1%

 

3.0%

 

 

(1) Adjusted local currency percentage changes are described in more detail in the “Reconciliation of Non-GAAP Amounts” at the end of this release.

As a result of the portfolio changes made this year, Sensient has changed the name of its Flavors & Fragrances Group, to the Flavors & Extracts Group in order to more accurately reflect the Group’s product portfolio.

The Flavors & Extracts Group reported third quarter revenue of $182.9 million compared to $167.6 million reported in the comparable period last year, an increase of 9.1%. Adjusted local currency revenue increased 12.9% in the quarter. The higher revenue was primarily the result of continued growth in natural ingredients and flavors, extracts, and flavor ingredients. Segment operating income was $23.8 million in the current quarter compared to $17.6 million reported in the comparable period last year, an increase of 35.5%. Adjusted local currency operating profit increased 24.1%. The Group’s higher profit was primarily a result of the higher volumes and the favorable impact of the Group’s cost reduction initiatives, offset by higher raw material costs in natural ingredients. Foreign currency translation increased segment revenue by approximately 1% and had an immaterial impact on operating income in the quarter.

The Color Group reported revenue of $116.4 million in the quarter compared to $127.0 million in last year’s comparable period, a decrease of 8.3%. Adjusted local currency revenue decreased 1.5% in the quarter. The Group continued to have good growth in food and pharmaceutical colors; however, this growth was offset by lower volumes in the personal care business, primarily as a result of the lower demand for makeup during COVID-19. Segment operating income was $23.6 million in the quarter compared to $23.4 million in last year’s comparable period. Adjusted local currency operating income increased approximately 3.0%. Despite double digit growth rates in food and pharmaceutical colors, the lower volumes in personal care continued to negatively impact the Color Group’s operating income in the quarter. Foreign currency translation decreased segment revenue by approximately 1% and had an immaterial impact on operating income in the quarter.

The Asia Pacific Group reported revenue of $30.7 million in the quarter compared to $30.1 million in last year’s comparable period, an increase of 2.0%. Adjusted local currency revenue increased 2.1% in the quarter. The Group had favorable growth in a number of regions, which was offset by the negative impact of COVID-19 restrictions in certain countries. Segment operating income was $6.1 million in the quarter compared to $5.4 million in last year’s comparable quarter, an increase of 13.3%. Adjusted local currency operating income increased 15.5% in the quarter. The higher profit was primarily a result of the favorable volume growth in certain regions and the favorable impact of the Group’s cost reduction initiatives. Foreign currency translation had an immaterial impact on revenue and decreased operating income by approximately 1% in the quarter.

Corporate & Other reported operating costs of $12.4 million in the current quarter compared to $7.7 million in last year’s comparable period. The higher costs are primarily due to the divestiture & other costs, operational improvement plan costs, and an increase in non-cash performance-based compensation.

During the third quarter, the Company implemented an operational improvement plan, primarily in the personal care business to consolidate cosmetic manufacturing operations. The costs for this operational improvement plan are included in the Company’s Corporate & Other segment.

The Company’s non-GAAP amounts eliminate the impact of currency movements, depreciation and amortization, non-cash share-based compensation, divestiture & other related costs, operational improvement plan costs, and the results of the operations divested and to be divested to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release.

2020 OUTLOOK

Based upon current trends, the Company reconfirms its previously issued diluted earnings per share guidance for 2020 of $2.10 to $2.35. The full year guidance now includes approximately 5 cents of foreign currency headwinds based on current exchange rates. The Company also reconfirms its previously issued 2020 adjusted diluted earnings per share(2) guidance of $2.60 to $2.80, which excludes divestiture & other related costs, operational improvement plan costs, the results of the operations divested and to be divested, and foreign currency impacts.

The Company is also confirming its previously issued guidance, which calls for low to mid-single digit revenue growth in 2020 on a local currency basis, excluding the revenues of the product lines divested and to be divested. The Company also continues to expect 2020 Adjusted EBITDA(2) to grow at a low to mid-single digit rate and Adjusted Operating Income(2) to be flat to down at a low-single digit rate, in each case on a local currency basis. Adjusted Operating Income will be impacted by higher non-cash performance-based compensation.

The Company’s guidance is based upon current trends and the effects of COVID-19 to date. The full impacts of the ongoing COVID-19 pandemic remain uncertain and management will continue to monitor its impacts on our business.

(2) See “Reconciliation of Non-GAAP Amounts” at the end of this release for more information.

CONFERENCE CALL

The Company will host a conference call to discuss its 2020 third quarter financial results at 8:30 a.m. CDT on Friday, October 16, 2020. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company’s web site at www.sensient.com.

A replay of the call will be available one hour after the end of the conference call through October 23, 2020, by calling (877) 344-7529 and referring to conference identification number 10147899. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company’s web site at www.sensient.com on or after October 20, 2020.

This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2020 Outlook” above. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the impact and uncertainty created by the ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers and suppliers, the availability and cost of raw materials and other supplies, logistics and transportation, governmental regulations and restrictions and general economic conditions; 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 and acquisition and divestiture activities; the success of the Company’s efforts to explore strategic alternatives for certain non-core product lines; the effectiveness of the Company’s past restructuring activities; changes in costs of raw materials, including energy; 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; currency exchange rate fluctuations; and other factors included in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and in other documents that the Company files with the SEC. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations. This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Except to the extent required by applicable laws, 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 herein will not be realized.

ABOUT SENSIENT TECHNOLOGIES

Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, cosmetic, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.

www.sensient.com

Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)
 
Consolidated Statements of Earnings Three Months Ended September 30, Nine Months Ended September 30,
 

2020

2019

% Change

2020

2019

% Change

 
Revenue

$

323,566

 

$

317,650

 

1.9

%

$

997,333

 

$

1,004,349

 

(0.7

%)

 
Cost of products sold

 

217,920

 

 

215,250

 

1.2

%

 

677,580

 

 

674,956

 

0.4

%

Selling and administrative expenses

 

64,491

 

 

63,612

 

1.4

%

 

201,912

 

 

193,817

 

4.2

%

 
Operating income

 

41,155

 

 

38,788

 

6.1

%

 

117,841

 

 

135,576

 

(13.1

%)

Interest expense

 

3,497

 

 

4,936

 

 

11,412

 

 

15,538

 

 
Earnings before income taxes

 

37,658

 

 

33,852

 

 

106,429

 

 

120,038

 

Income taxes

 

4,748

 

 

1,981

 

 

22,126

 

 

21,029

 

 
Net earnings

$

32,910

 

$

31,871

 

3.3

%

$

84,303

 

$

99,009

 

(14.9

%)

 
Earnings per share of common stock:
Basic

$

0.78

 

$

0.75

 

$

1.99

 

$

2.34

 

 
Diluted

$

0.78

 

$

0.75

 

$

1.99

 

$

2.34

 

 
Average common shares outstanding:
Basic

 

42,307

 

 

42,272

 

 

42,299

 

 

42,261

 

 
Diluted

 

42,349

 

 

42,299

 

 

42,326

 

 

42,291

 

 
 
 
Results by Segment Three Months Ended September 30, Nine Months Ended September 30,
 

Revenue

2020

2019

% Change

2020

2019

% Change

 
Flavors & Extracts

$

182,866

 

$

167,577

 

9.1

%

$

552,975

 

$

531,264

 

4.1

%

Color

 

116,414

 

 

127,005

 

(8.3

%)

 

381,205

 

 

409,796

 

(7.0

%)

Asia Pacific

 

30,740

 

 

30,125

 

2.0

%

 

89,062

 

 

87,646

 

1.6

%

Intersegment elimination

 

(6,454

)

 

(7,057

)

 

(25,909

)

 

(24,357

)

 
Consolidated

$

323,566

 

$

317,650

 

1.9

%

$

997,333

 

$

1,004,349

 

(0.7

%)

 
 
Operating Income
 
Flavors & Extracts

$

23,844

 

$

17,600

 

35.5

%

$

67,467

 

$

60,775

 

11.0

%

Color

 

23,559

 

 

23,436

 

0.5

%

 

75,486

 

 

81,512

 

(7.4

%)

Asia Pacific

 

6,123

 

 

5,406

 

13.3

%

 

16,031

 

 

13,825

 

16.0

%

Corporate & Other

 

(12,371

)

 

(7,654

)

 

(41,143

)

 

(20,536

)

 
Consolidated

$

41,155

 

$

38,788

 

6.1

%

$

117,841

 

$

135,576

 

(13.1

%)

 

Sensient Technologies Corporation

(In thousands)
(Unaudited)
 
Consolidated Condensed Balance Sheets September 30, December 31,

2020

2019

 
Cash and cash equivalents

$

26,900

$

21,153

Trade accounts receivable (net)

 

222,388

 

213,201

Inventories

 

401,046

 

422,517

Prepaid expenses and other current assets

 

43,681

 

40,049

Assets held for sale

 

58,534

 

91,293

Total Current Assets

 

752,549

 

788,213

 
Goodwill & intangible assets (net)

 

423,419

 

418,844

Property, plant, and equipment (net)

 

429,509

 

437,179

Other assets

 

108,469

 

95,915

 
Total Assets

$

1,713,946

$

1,740,151

 
Trade accounts payable

$

93,491

$

94,653

Short-term borrowings

 

24,460

 

20,612

Other current liabilities

 

76,595

 

66,925

Liabilities held for sale

 

17,491

 

19,185

Total Current Liabilities

 

212,037

 

201,375

 
Long-term debt

 

537,124

 

598,499

Accrued employee and retiree benefits

 

26,556

 

25,822

Other liabilities

 

41,444

 

32,866

Shareholders’ Equity

 

896,785

 

881,589

 
Total Liabilities and Shareholders’ Equity

$

1,713,946

$

1,740,151

 
Sensient Technologies Corporation
(In thousands, except per share amounts)
(Unaudited)
 
Consolidated Statements of Cash Flows
Nine Months Ended September 30,

2020

2019

Cash flows from operating activities:
Net earnings

$

84,303

 

$

99,009

 

Adjustments to arrive at net cash provided by operating activities:
Depreciation and amortization

 

 

36,831

 

 

 

41,706

 

Share-based compensation expense (income)

 

4,017

 

 

(816

)

Net gain on assets

 

(254

)

 

(1,224

)

Net loss on divestitures and other charges

 

5,821

 

 

 

Deferred income taxes

 

(9,001

)

 

(2,303

)

Changes in operating assets and liabilities:
Trade accounts receivable

 

(7,962

)

 

6,355

 

Inventories

 

17,433

 

 

14,493

 

Prepaid expenses and other assets

 

(4,726

)

 

(5,053

)

Accounts payable and other accrued expenses

 

9,018

 

 

(19,565

)

Accrued salaries, wages and withholdings from employees

 

7,410

 

 

(1,647

)

Income taxes

 

(3,899

)

 

(5,294

)

Other liabilities

 

3,936

 

 

1,920

 

 
Net cash provided by operating activities

 

142,927

 

 

127,581

 

 
Cash flows from investing activities:
Acquisition of property, plant, and equipment

 

(34,009

)

 

(26,073

)

Proceeds from sale of assets

 

1,022

 

 

2,033

 

Proceeds from divesture of businesses

 

12,228

 

 

 

Other investing activity

 

4,955

 

 

4,280

 

 
Net cash used in investing activities

 

(15,804

)

 

(19,760

)

 
Cash flows from financing activities:
Proceeds from additional borrowings

 

33,164

 

 

35,126

 

Debt payments

 

(101,061

)

 

(90,966

)

Dividends paid

 

(49,537

)

 

(45,688

)

Other financing activity

 

(415

)

 

(1,027

)

 
Net cash used in financing activities

 

(117,849

)

 

(102,555

)

 
Effect of exchange rate changes on cash and cash equivalents

 

(3,527

)

 

(2,745

)

 
Net increase in cash and cash equivalents

 

5,747

 

 

2,521

 

Cash and cash equivalents at beginning of period

 

21,153

 

 

31,901

 

Cash and cash equivalents at end of period

$

26,900

 

$

34,422

 

 
 
Supplemental Information
Nine Months Ended September 30,

2020

2019

 
Dividends paid per share

$

1.17

 

$

1.08

 

 
Sensient Technologies Corporation
(In thousands, except percentages and per share amounts)
(Unaudited)
 
Reconciliation of Non-GAAP Amounts
 
The Company’s results for the three and nine months ended September 30, 2020 and 2019 include adjusted revenue, adjusted operating income, adjusted net earnings, and adjusted diluted EPS, which exclude divestiture & other related costs, operational improvement plan costs, and the results of operations divested or to be divested.
 
Three Months Ended September 30, Nine Months Ended September 30,

2020

2019

% Change

2020

2019

% Change

Revenue (GAAP)

$

323,566

 

$

317,650

 

1.9

%

$

997,333

 

$

1,004,349

 

(0.7

%)

Revenue of the product lines divested or to be divested

 

(23,588

)

 

(34,112

)

 

(88,390

)

 

(109,489

)

Adjusted revenue

$

299,978

 

$

283,538

 

5.8

%

$

908,943

 

$

894,860

 

1.6

%

 
Operating income (GAAP)

$

41,155

 

$

38,788

 

6.1

%

$

117,841

 

$

135,576

 

(13.1

%)

Divestiture & other related costs (income) – Cost of products sold

 

(148

)

 

 

 

1,791

 

 

 

Divestiture & other related costs – Selling and administrative expenses

 

312

 

 

 

 

8,689

 

 

 

Operating income of the product lines divested or to be divested

 

(2,449

)

 

(856

)

 

(4,165

)

 

(1,233

)

Operational improvement plan – Cost of products sold

 

35

 

 

 

 

35

 

 

 

Operational improvement plan – Selling and administrative expenses

 

2,606

 

 

 

 

2,606

 

 

 

Adjusted operating income

$

41,511

 

$

37,932

 

9.4

%

$

126,797

 

$

134,343

 

(5.6

%)

 
Net earnings (GAAP)

$

32,910

 

$

31,871

 

3.3

%

$

84,303

 

$

99,009

 

(14.9

%)

Divestiture & other related costs, before tax

 

164

 

 

 

 

10,480

 

 

 

Tax impact of divestiture & other related costs

 

(787

)

 

 

 

(1,212

)

 

 

Net earnings of the product lines divested or to be divested, before tax

 

(2,449

)

 

(856

)

 

(4,165

)

 

(1,233

)

Tax impact of the product lines divested or to be divested

 

655

 

 

87

 

 

1,155

 

 

203

 

Operational improvement plan costs, before tax

 

2,641

 

 

 

 

2,641

 

 

 

Tax impact of operational improvement plan

 

(656

)

 

 

 

(656

)

 

 

Adjusted net earnings

$

32,478

 

$

31,102

 

4.4

%

$

92,546

 

$

97,979

 

(5.5

%)

 
Diluted earnings per share (GAAP)

$

0.78

 

$

0.75

 

4.0

%

$

1.99

 

$

2.34

 

(15.0

%)

Divestiture & other related costs (income), net of tax

 

(0.01

)

 

 

 

0.22

 

 

 

Results of operations of the product lines divested or to be divested, net of tax

 

(0.04

)

 

(0.02

)

 

(0.07

)

 

(0.02

)

Operational improvement plan costs, net of tax

 

0.05

 

 

 

 

0.05

 

 

 

Adjusted diluted earnings per share

$

0.77

 

$

0.74

 

4.1

%

$

2.19

 

$

2.32

 

(5.6

%)

 
Note: Earnings per share calculations may not foot due to rounding differences.
 
Results by Segment Three Months Ended September 30,
Divestiture &
Operational
Improvement Adjusted Divestiture Adjusted

Revenue

2020

Plan Impact

2020

2019

Impact

2019

 
Flavors & Extracts

$

182,866

 

$

(22,978

)

$

159,888

 

$

167,577

 

$

(25,954

)

$

141,623

 

Color

 

116,414

 

 

(669

)

 

115,745

 

 

127,005

 

 

(8,176

)

 

118,829

 

Asia Pacific

 

30,740

 

 

(68

)

 

30,672

 

 

30,125

 

 

(237

)

 

29,888

 

Intersegment elimination

 

(6,454

)

 

127

 

 

(6,327

)

 

(7,057

)

 

255

 

 

(6,802

)

 
Consolidated

$

323,566

 

$

(23,588

)

$

299,978

 

$

317,650

 

$

(34,112

)

$

283,538

 

 
 
Operating Income
 
Flavors & Extracts

$

23,844

 

$

(2,241

)

$

21,603

 

$

17,600

 

$

(109

)

$

17,491

 

Color

 

23,559

 

 

(185

)

 

23,374

 

 

23,436

 

 

(689

)

 

22,747

 

Asia Pacific

 

6,123

 

 

(23

)

 

6,100

 

 

5,406

 

 

(58

)

 

5,348

 

Corporate & Other

 

(12,371

)

 

2,805

 

 

(9,566

)

 

(7,654

)

 

 

 

(7,654

)

 
Consolidated

$

41,155

 

$

356

 

$

41,511

 

$

38,788

 

$

(856

)

$

37,932

 

 
Results by Segment Nine Months Ended September 30,
Divestiture &
Operational
Improvement Adjusted Divestiture Adjusted

Revenue

2020

Plan Impact

2020

2019

Impact

2019

 
Flavors & Extracts

$

552,975

 

$

(75,165

)

$

477,810

 

$

531,264

 

$

(82,055

)

$

449,209

 

Color

 

381,205

 

 

(13,242

)

 

367,963

 

 

409,796

 

 

(27,590

)

 

382,206

 

Asia Pacific

 

89,062

 

 

(402

)

 

88,660

 

 

87,646

 

 

(563

)

 

87,083

 

Intersegment elimination

 

(25,909

)

 

419

 

 

(25,490

)

 

(24,357

)

 

719

 

 

(23,638

)

 
Consolidated

$

997,333

 

$

(88,390

)

$

908,943

 

$

1,004,349

 

$

(109,489

)

$

894,860

 

 
 
Operating Income
 
Flavors & Extracts

$

67,467

 

$

(5,078

)

$

62,389

 

$

60,775

 

$

(197

)

$

60,578

 

Color

 

75,486

 

 

1,029

 

 

76,515

 

 

81,512

 

 

(894

)

 

80,618

 

Asia Pacific

 

16,031

 

 

(116

)

 

15,915

 

 

13,825

 

 

(142

)

 

13,683

 

Corporate & Other

 

(41,143

)

 

13,121

 

 

(28,022

)

 

(20,536

)

 

 

 

(20,536

)

 
Consolidated

$

117,841

 

$

8,956

 

$

126,797

 

$

135,576

 

$

(1,233

)

$

134,343

 

 
Sensient Technologies Corporation
(In thousands, except percentages)
(Unaudited)
 
Reconciliation of Non-GAAP Amounts – Continued
 
The following table summarizes the percentage change in the 2020 results compared to the 2019 results for the corresponding periods.
 
Three Months Ended September 30, Nine Months Ended September 30,
Revenue Total Foreign
Exchange
Rates
Divestiture &
Operational
Improvement
Plan Impact
Adjusted
Local
Currency
Total Foreign
Exchange
Rates
Divestiture &
Operational
Improvement
Plan Impact
Adjusted
Local
Currency
Flavors & Extracts

9.1

%

0.5

%

(4.3

%)

12.9

%

4.1

%

(0.8

%)

(2.3

%)

7.2

%

Color

(8.3

%)

(1.2

%)

(5.6

%)

(1.5

%)

(7.0

%)

(2.6

%)

(3.2

%)

(1.2

%)

Asia Pacific

2.0

%

0.4

%

(0.5

%)

2.1

%

1.6

%

(1.2

%)

(0.2

%)

3.0

%

Total Revenue

1.9

%

(0.2

%)

(4.0

%)

6.1

%

(0.7

%)

(1.6

%)

(2.1

%)

3.0

%

 
Operating Income
Flavors & Extracts

35.5

%

(0.3

%)

11.7

%

24.1

%

11.0

%

(0.9

%)

7.9

%

4.0

%

Color

0.5

%

(0.4

%)

(2.1

%)

3.0

%

(7.4

%)

(2.3

%)

(2.0

%)

(3.1

%)

Asia Pacific

13.3

%

(1.4

%)

(0.8

%)

15.5

%

16.0

%

(0.5

%)

(0.4

%)

16.9

%

Corporate & Other

61.6

%

0.0

%

36.7

%

24.9

%

100.3

%

0.0

%

63.8

%

36.5

%

Total Operating Income

6.1

%

(0.6

%)

(3.4

%)

10.1

%

(13.1

%)

(1.8

%)

(7.4

%)

(3.9

%)

Diluted Earnings Per Share

4.0

%

0.0

%

(2.8

%)

6.8

%

(15.0

%)

(1.8

%)

(9.8

%)

(3.4

%)

Adjusted EBITDA

8.6

%

(0.3

%)

N/A

 

8.9

%

(1.9

%)

(1.5

%)

N/A

 

(0.4

%)

 
 
The following table summarizes the reconciliation between Operating Income (GAAP) and Adjusted EBITDA for the three and nine months ended September 30, 2020 and 2019.
 
Three Months Ended September 30, Nine Months Ended September 30,
 

2020

2019

% Change

2020

2019

% Change

Operating income (GAAP)

$

41,155

 

$

38,788

 

6.1

%

$

117,841

 

$

135,576

 

(13.1

%)

Depreciation and amortization

 

12,309

 

 

13,965

 

 

36,831

 

 

41,706

 

Depreciation and amortization, product lines divested or to be divested

 

(49

)

 

(1,473

)

 

(145

)

 

(4,495

)

Share-based compensation expense (income)

 

1,355

 

 

339

 

 

4,017

 

 

(816

)

Divestiture & other related costs, before tax

 

164

 

 

 

 

10,480

 

 

 

Results of operations of the product lines divested or to be divested, before tax

 

(2,449

)

 

(856

)

 

(4,165

)

 

(1,233

)

Operational improvement plan costs, before tax

 

2,641

 

 

 

 

2,641

 

 

 

Adjusted EBITDA

$

55,126

 

$

50,763

 

8.6

%

$

167,500

 

$

170,738

 

(1.9

%)

 
We have included each of these non-GAAP measures in order to provide additional information regarding our underlying operating results and comparable period-over-period 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 release and our SEC filings. 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 we believe 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.

Contacts

Amy Agallar

(414) 347-3706

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