================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31, 2003 -------------- 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: 1-7626 ------ SENSIENT TECHNOLOGIES CORPORATION --------------------------------- (Exact name of registrant as specified in its charter) Wisconsin 39-0561070 - ------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-5304 ----------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (414) 271-6755 -------------- 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 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 X No Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X 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 30, 2003 - ------------------------------------------ ----------------------------- Common Stock, par value $0.10 per share 47,119,974 shares ================================================================================
SENSIENT TECHNOLOGIES CORPORATION INDEX <TABLE> <CAPTION> Page No. -------- <S> <C> PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Consolidated Condensed Statements of Earnings - Three Months Ended March 31, 2003 and 2002. 1 Consolidated Condensed Balance Sheets - March 31, 2003 and December 31, 2002. 2 Consolidated Condensed Statements of Cash Flows - Three Months Ended March 31, 2003 and 2002. 3 Notes to Consolidated Condensed Financial Statements. 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 9 Item 4. Controls and Procedures. 9 PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K. 10 Signatures. 10 Certifications. 11 Exhibit Index. 13 </TABLE>
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SENSIENT TECHNOLOGIES CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (In thousands except per share amounts) (Unaudited) <TABLE> <CAPTION> Three Months Ended March 31, ----------------------- 2003 2002 -------- -------- <S> <C> <C> Revenue $235,097 $213,123 Cost of products sold 157,593 142,526 Selling and administrative expenses 42,570 38,062 -------- -------- Operating income 34,934 32,535 Interest expense 7,245 7,616 -------- -------- Earnings before income taxes 27,689 24,919 Income taxes 7,227 7,974 -------- -------- Net earnings $ 20,462 $ 16,945 ======== ======== Average number of common shares outstanding: Basic 47,058 47,344 ======== ======== Diluted 47,398 47,670 ======== ======== Earnings per common share: Basic $ .43 $ .36 ======== ======== Diluted $ .43 $ .36 ======== ======== Dividends per common share $ .1400 $ .1325 ======== ======== </TABLE> See accompanying notes to consolidated condensed financial statements. -1-
SENSIENT TECHNOLOGIES CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited) <TABLE> <CAPTION> March 31, December 31, ASSETS 2003 2002 ------ ----------- ----------- <S> <C> <C> CURRENT ASSETS: Cash and cash equivalents $ 4,557 $ 2,103 Trade accounts receivable, net 168,549 160,155 Inventories 273,673 269,701 Prepaid expenses and other current assets 46,484 43,619 ----------- ----------- TOTAL CURRENT ASSETS 493,263 475,578 ----------- ----------- OTHER ASSETS 90,031 85,679 GOODWILL 385,469 384,241 INTANGIBLE ASSETS, NET 13,014 13,235 PROPERTY, PLANT AND EQUIPMENT: Land and buildings 181,262 182,464 Machinery and equipment 482,346 462,925 ----------- ----------- 663,608 645,389 Less accumulated depreciation (325,928) (314,151) ----------- ----------- 337,680 331,238 ----------- ----------- TOTAL ASSETS $ 1,319,457 $ 1,289,971 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Trade accounts payable $ 50,181 $ 55,546 Accrued salaries, wages and withholdings from employees 10,425 14,197 Other accrued expenses 68,255 65,069 Income taxes 27,172 27,526 Short-term borrowings 56,223 34,618 Current maturities of long-term debt 12,290 12,374 ----------- ----------- TOTAL CURRENT LIABILITIES 224,546 209,330 DEFERRED INCOME TAXES 11,839 10,942 OTHER LIABILITIES 20,056 18,694 ACCRUED EMPLOYEE AND RETIREE BENEFITS 37,368 39,940 LONG-TERM DEBT 514,446 511,707 SHAREHOLDERS' EQUITY: Common stock 5,396 5,396 Additional paid-in capital 72,374 72,390 Earnings reinvested in the business 635,224 621,525 Treasury stock, at cost (139,243) (137,074) Unearned portion of restricted stock (2,737) (2,951) Accumulated other comprehensive income (loss) (59,812) (59,928) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 511,202 499,358 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,319,457 $ 1,289,971 =========== =========== </TABLE> See accompanying notes to consolidated condensed financial statements. -2-
SENSIENT TECHNOLOGIES CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) <TABLE> <CAPTION> Three Months Ended March 31, ---------------------- 2003 2002 -------- -------- <S> <C> <C> Net cash provided by operating activities $ 853 $ 23,371 -------- -------- Cash flows from investing activities: Acquisition of property, plant and equipment (10,336) (5,099) Acquisition of new businesses (net of cash acquired) (4,107) (43,374) Proceeds from sale of assets 1,948 3,492 Decrease in other assets 68 26 -------- -------- Net cash used in investing activities (12,427) (44,955) -------- -------- Cash flows from financing activities: Proceeds from additional borrowings 23,232 22,554 Reduction in debt (691) (313) Purchase of treasury stock (4,969) -- Dividends paid (6,763) (6,286) Proceeds from options exercised and other 2,693 3,447 -------- -------- Net cash provided by financing activities 13,502 19,402 -------- -------- Effect of exchange rate changes on cash and cash equivalents 526 (84) -------- -------- Net increase (decrease) in cash and cash equivalents 2,454 (2,266) Cash and cash equivalents at beginning of period 2,103 2,317 -------- -------- Cash and cash equivalents at end of period $ 4,557 $ 51 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 2,705 $ 3,069 Income taxes 5,987 6,234 Liabilities assumed in acquisitions $ -- $ 10,539 </TABLE> See accompanying notes to consolidated condensed financial statements. -3-
SENSIENT TECHNOLOGIES CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Accounting Policies In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of March 31, 2003 and December 31, 2002, and the results of operations and cash flows for the three months ended March 31, 2003 and 2002. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. Expenses are charged to operations in the year incurred. However, for interim reporting purposes, certain expenses are charged to operations based on an estimate rather than as expenses are actually incurred. Certain amounts as previously presented have been reclassified to conform to the current period presentation. Refer to the notes in the Company's annual consolidated financial statements for the year ended December 31, 2002, 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. Inventories At March 31, 2003 and December 31, 2002, inventories included finished and in-process products totaling $201.9 million and $195.9 million, respectively, and raw materials and supplies of $71.8 million and $73.8 million, respectively. 3. Segment Information Operating results and the related assets by segment for the periods presented are as follows: <TABLE> <CAPTION> (In thousands) Flavors & Corporate Fragrances Color & Other Consolidated ---------- ---------- ---------- ------------ <S> <C> <C> <C> <C> Three months ended March 31, 2003: Revenues from external customers $ 133,966 $ 86,153 $ 14,978 $ 235,097 Intersegment revenues 5,562 3,415 -- 8,977 ---------- ---------- ---------- ---------- Total revenue $ 139,528 $ 89,568 $ 14,978 $ 244,074 ========== ========== ========== ========== Operating income (loss) $ 20,028 $ 20,196 $ (5,290) $ 34,934 Interest expense -- -- 7,245 7,245 ---------- ---------- ---------- ---------- Earnings (loss) before income taxes $ 20,028 $ 20,196 $ (12,535) $ 27,689 ========== ========== ========== ========== Assets $ 611,328 $ 560,058 $ 148,071 $1,319,457 ========== ========== ========== ========== Three months ended March 31, 2002: Revenues from external customers $ 128,877 $ 70,497 $ 13,749 $ 213,123 Intersegment revenues 5,005 5,391 -- 10,396 ---------- ---------- ---------- ---------- Total revenue $ 133,882 $ 75,888 $ 13,749 $ 223,519 ========== ========== ========== ========== Operating income (loss) $ 18,937 $ 17,789 $ (4,191) $ 32,535 Interest expense -- -- 7,616 7,616 ---------- ---------- ---------- ---------- Earnings (loss) before income taxes $ 18,937 $ 17,789 $ (11,807) $ 24,919 ========== ========== ========== ========== Assets $ 532,353 $ 494,456 $ 118,590 $1,145,399 ========== ========== ========== ========== </TABLE> -4-
4. Acquisitions During the first three months of 2003, the Company acquired certain assets of Kyowa Koryo Kagaku Kabushiki Kaisha, a former Japanese flavor producer, for $4.1 million (net of cash acquired). The Company has not completed the purchase price allocation related to the acquisition. During the first three months of 2002, the Company acquired three businesses for cash in an aggregate amount of $43.4 million (net of cash acquired). The businesses acquired were ECS Specialty Inks and Dyes, a producer and marketer of inks for specialty printing applications, the flavors and essential oil operations of C. Melchers GmbH & Company, and SynTec GmbH, a manufacturer of specialty dyes and chemicals for the imaging industry. The Company may be required to pay up to 4.6 million Euro ($4.9 million) of additional cash consideration for the 2002 acquisitions subject to specific performance targets in the first two years following the acquisitions. 5. Shareholders' Equity Disclosures During the three months ended March 31, 2003, the Company repurchased 0.3 million shares of its common stock for an aggregate price of $5.0 million. The Company did not repurchase any shares of its common stock during the three months ended March 31, 2002. Comprehensive income is comprised of net earnings, foreign currency translation and unrealized gains and losses on cash flow hedges. Total comprehensive income for the three months ended March 31, 2003 and 2002 was $20.6 million and $17.2 million, respectively. 6. Stock Plans The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation." Stock options are granted at prices equal to the fair value of the Company's common stock on the dates of grant. Accordingly, no significant compensation cost has been recognized for the grant of stock options under the Company's stock option plans. If the Company had elected to recognize compensation cost based on the fair value of the options granted at grant date as prescribed by SFAS No. 123, net earnings and earnings per common share would have been reduced to the pro forma amounts indicated below: <TABLE> <CAPTION> Three Months Ended March 31, ---------------------------- 2003 2002 ---------- ---------- <S> <C> <C> Net earnings: As reported $ 20,462 $ 16,945 Add: reported stock compensation expense - net of tax 132 106 Less: fair value stock compensation expense - net of tax (487) (599) ---------- ---------- Pro forma net earnings $ 19,975 $ 16,346 ========== ========== Earnings per common share: Basic as reported $ .43 $ .36 Less: net impact of fair value stock expense - net of tax (.01) (.01) ---------- ---------- Basic pro forma $ .42 $ .35 Diluted as reported $ .43 $ .36 Less: net impact of fair value stock expense - net of tax (.01) (.02) ---------- ---------- Diluted pro forma $ .42 $ .34 </TABLE> -5-
7. Cash Flows from Operating Activities Cash flows from operating activities are detailed below: <TABLE> <CAPTION> Three Months Ended March 31, ---------------------------- 2003 2002 -------- -------- <S> <C> <C> Cash flows from operating activities: Net earnings $ 20,462 $ 16,945 Adjustments to arrive at net cash provided by operating activities: Depreciation and amortization 11,074 9,680 Gain on sale of assets (1,470) (111) Changes in operating assets and liabilities (net of effects of acquisitions of businesses) (29,213) (3,143) -------- -------- Net cash provided by operating activities $ 853 $ 23,371 ======== ======== </TABLE> 8. Guarantees In connection with the sale of substantially all of the Company's Yeast business on February 23, 2001, the Company has provided the buyer of these operations with indemnification against certain potential liabilities as is customary in transactions of this nature. The period provided for indemnification against most types of claims has now expired, but for specific types of claims including, but not limited to tax and environmental liabilities, the amount of time provided for indemnification is either five years or the applicable statute of limitations. The maximum amount of the Company's liability related to these provisions is capped at approximately 35% of the consideration received in the transaction. In cases where the Company believes it is probable that payments will be required under these provisions, a liability was recognized at the time of the asset sale. The Company believes that the probability of incurring payments under these provisions in excess of the amount of the liability recorded is remote. -6-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Revenue for the quarter ended March 31, 2003 increased by 10.3% to $235.1 million from $213.1 million for the comparable quarter of 2002. Revenue for the Flavors & Fragrances segment increased 4.2% for the quarter over the comparable period last year. The Color segment increased revenue by 18.0% for the quarter over the comparable period last year. Additional information on group results can be found in the Segment Information section. Gross profit margin for the quarter ended March 31, 2003 was 33.0%, which was consistent with the gross profit margin of 33.1% for the same period last year. Selling and administrative expenses as a percent of revenue increased to 18.1% for the three months ended March 31, 2003 compared to 17.9% in the comparable period of 2002. The increase was primarily attributable to currency fluctuations. Operating income for the three months ended March 31, 2003 was $34.9 million, an increase of 7.4% from $32.5 million for the third quarter last year. Favorable foreign exchange rates increased revenue and operating income by approximately 5% and 4%, respectively, for the three months ended March 31, 2003 over the comparable period last year. Interest expense for the three months ended March 31, 2003 declined to $7.2 million from $7.6 million for the first quarter last year. The decrease was a result of lower interest rates more than offsetting higher average debt balances. The effective income tax rate was 26.1% and 32.0% for the three months ended March 31, 2003 and 2002, respectively. The effective tax rate for the quarter ended March 31, 2003 was reduced by the favorable settlement of certain prior year tax matters. Management expects the effective tax rate for the remainder of 2003 to be 32.0%. SEGMENT INFORMATION Flavors & Fragrances - The Flavors & Fragrances segment reported a 4.2% increase in revenue, to $139.5 million for the first quarter of 2003 compared to $133.9 million for the same period last year. Favorable foreign exchange rates resulted in a 5.2% increase in revenue and acquired businesses contributed a 2.7% increase in revenue. Higher revenue as a result of these factors was offset by soft U.S. demand for flavors. Operating income in the quarter of $20.0 million increased 5.8% compared to last year and operating margins increased 30 basis points, to 14.3%. Profit within the European flavor operations improved by $1.6 million excluding foreign currency effects, with every significant profit center reporting higher profitability. Operating income in the dehydrated flavors business improved by $.7 million as a result of operating efficiencies and a favorable 2002 harvest. These gains were partially offset by decreases within the traditional U.S. flavor business. Color - Revenue for the Color segment increased by $13.7 million, or 18.0% to $89.6 million in the first quarter of 2003. Approximately 40% of the increase was attributable to organic growth in the North American food color and inkjet ink product lines. Foreign exchange and acquisitions each contributed approximately 30% of the increase in revenue. Operating income in the first quarter of 2003 was $20.2 million versus $17.8 million from the 2002 first quarter. Operating income as a percent of revenue was 22.5%, a decrease of 90 basis points from the comparable quarter last year primarily as a result of lower gross margins realized in the technical color business during the quarter. -7-
FINANCIAL CONDITION The Company's ratio of debt to total capital was 53.3% as of March 31, 2003, up from 52.8% as of December 31, 2002. The increase resulted from an increase in debt needed to fund capital expenditures and treasury share purchases. Net cash provided by operating activities was $0.9 million for the three months ended March 31, 2003, compared to $23.4 million for the three months ended March 31, 2002. The decrease in cash provided by operating activities was primarily due to increased inventory levels. Inventories increased during the first quarter of 2003 from temporary softness in the U.S. flavor business as well as from the manufacturing consolidation plan for a recently acquired Color business, which will be completed by the end of the third quarter of 2003. Net cash used in investing activities was $12.4 million for the three months ended March 31, 2003 compared to $45.0 million of net cash used in investing activities in the comparable period last year. Net cash used in investing activities in 2003 included capital expenditures of $10.3 million and acquisitions of $4.1 million. Cash used in investing activities in 2002 included acquisitions of $43.4 million and capital expenditures of $5.1 million. Net cash provided by financing activities was $13.5 million for the three months ended March 31, 2003, compared to $19.4 million of net cash provided in the comparable period in the prior year. Net borrowings of $22.5 million in 2003 were consistent with net borrowings of $22.2 million in 2002. During 2003, the borrowings were used to fund capital expenditures, acquisitions, and treasury stock purchases. During 2002, net borrowings were used to fund capital expenditures and acquisitions. Dividends of $6.8 million and $6.3 million were paid during the three months ended March 31, 2003 and 2002, respectively. The Company increased its quarterly cash dividend per share from $.1325 to $.14 per share effective in December 2002. In addition, the Company raised its quarterly dividend to 15 cents per share payable on June 2, 2003 to shareholders of record on May 8, 2003. As a result of these increases, the annual dividend has grown from $.53 to $.60 per share since the third quarter of 2002. The Company's financial position remains strong. Its expected cash flows from operations and existing lines of credit can be used to meet future cash requirements for operations, capital expansion programs and dividend payments to shareholders. CRITICAL ACCOUNTING POLICIES In preparing the financial statements in accordance with accounting principles generally accepted in the U.S., management is required to make estimates and assumptions that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information disclosures of the Company, including information about contingencies, risk, and financial condition. The Company believes, given current facts and circumstances, its estimates and assumptions are reasonable, adhere to accounting principles generally accepted in the U.S., and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise. The Company makes routine estimates and judgments in determining the net realizable value of accounts receivable, inventories, property, plant and equipment, and prepaid expenses. In addition to these estimates and judgments, management believes the Company's most critical accounting estimates and assumptions are in the following areas: Goodwill Valuation The Company reviews the carrying value of goodwill annually utilizing several valuation methodologies, including a discounted cash flow model. Changes in estimates of future cash flows caused by items such as unforeseen events or changes in market conditions, could negatively affect the reporting segment's fair value and result in an impairment charge. However, the current fair values of the reporting segments are significantly in excess of carrying values, and accordingly management believes that only significant changes in the cash flow assumptions would result in impairment. -8-
Income Taxes The Company files income tax returns and estimates its income tax expense in each of the taxing jurisdictions in which it operates. The Company is subject to a tax audit in each of these jurisdictions, which could result in changes to the estimated tax expense. The amount of these changes would vary by jurisdiction and would be recorded when known. These changes could be significant to the Company's financial statements. Management has recorded valuation allowances to reduce its deferred tax assets to the amount that is more likely than not to be realized. In doing so, management has considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance. An adjustment to the recorded valuation allowance as a result of changes in facts or circumstances could result in a significant change in the Company's tax expense. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the Company's market risk during the quarter ended March 31, 2003. For additional information on market risk, refer to pages 25 and 26 of the Company's 2002 Annual Report, portions of which were filed as Exhibit 13.1 to the Company's Form 10-K for the year ended December 31, 2002. ITEM 4. CONTROLS AND PROCEDURES The Company maintains a system of disclosure controls and procedures that is designed to assure that information, which is required to be disclosed by the Company, is accumulated and communicated to management in a timely manner. Management has reviewed this system of disclosure controls and procedures within 90 days of the date hereof, and has concluded that the current system of controls and procedures is effective. The Company maintains a system of internal controls and procedures for financial reporting. Since the date of management's most recent evaluation, there were no significant changes in internal controls or in other factors that could significantly affect internal controls. FORWARD-LOOKING STATEMENTS This document contains forward-looking statements that reflect management's current assumptions and estimates of future economic circumstances, industry conditions, Company performance and financial results. 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 those 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 the pace and nature of new product introductions by the Company's customers; execution of the Company's acquisition program and results of newly acquired businesses; the Company's ability to successfully implement its growth strategies; industry and economic factors related to the Company's domestic and international business; growth in markets for products in which the Company competes; industry acceptance of price increases and currency exchange rate fluctuations. 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. -9-
PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. (See Exhibit Index following this report.) (b) Reports on Form 8-K. A report on Form 8-K was filed on April 17, 2003 to disclose earnings for the quarter ended March 31, 2003. 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 14, 2003 By: /s/ John L. Hammond ------------------------- John L. Hammond, Vice President, Secretary & General Counsel Date: May 14, 2003 By: /s/ Richard F. Hobbs -------------------------- Richard F. Hobbs, Vice President, Chief Financial Officer & Treasurer -10-
CERTIFICATIONS I, Kenneth P. Manning, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 14, 2003 By: /s/ Kenneth P. Manning - -------------------------- Kenneth P. Manning, Chairman, President & Chief Executive Officer -11-
CERTIFICATIONS I, Richard F. Hobbs, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Sensient Technologies Corporation; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 14, 2003 By: /s/ Richard F. Hobbs - ------------------------ Richard F. Hobbs, Vice President, Chief Financial Officer & Treasurer -12-
SENSIENT TECHNOLOGIES CORPORATION EXHIBIT INDEX QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2003 <TABLE> <CAPTION> Exhibit Description Incorporated by Reference From Filed Herewith - ------- ----------- ------------------------------ -------------- <S> <C> <C> <C> 99.1 Certification of Sensient's Chairman, President X & Chief Executive Officer and Vice President, Chief Financial Officer & Treasurer pursuant to 18 United States Code Section 1350 </TABLE> -13-