Sensient Technologies Corporation Reports Earnings for the Year Ended December 31, 2004

Business Wire, Feb 15, 2005

MILWAUKEE -- Annual Revenue Exceeds $1 Billion for First Time in Company History; Record Cash Flow of Over $125 Million

Sensient Technologies Corporation (NYSE: SXT) announced today that revenue increased 6.1% to $1.047 billion for the year ended December 31, 2004, from $987.2 million reported for 2003. Diluted earnings per share for 2004 equaled $1.58. Diluted earnings per share in the prior year were $1.73 and included a special charge of $6.5 million ($4.7 million, or 10 cents, after tax) and a one-time benefit of $13.3 million ($8.2 million, or 17 cents, after tax) related to the elimination of the subsidy for certain post-retirement programs. Cash flows from operating activities in 2004 reached a record level of $125.7 million.

Revenue for the fourth quarter ended December 31, 2004, increased 12.0% to $272.3 million, up from $243.1 million for the same period in 2003. Diluted earnings per share for the fourth quarter 2004 increased 2.5% to 41 cents compared to 40 cents for the prior year's fourth quarter. Fourth quarter 2003 results included a special charge and a one-time benefit as described above. The fourth quarter results for 2003 and 2004 included tax benefits of approximately five cents per share for the settlement of prior years' tax liabilities, the implementation of tax planning strategies and other adjustments. In addition, the fourth quarter of 2004 included a $3.0 million ($1.9 million, or four cents, after tax) charge related to the divestiture of a small flavor product line.

"In 2004, we achieved record revenue exceeding $1 billion and record cash flow," said Kenneth P. Manning, Chairman, President and CEO of Sensient Technologies Corporation.

Sensient also reported today that its independent auditor, Deloitte & Touche, has identified control deficiencies that will prevent the auditor from issuing an unqualified report on the Company's internal controls over financial reporting as of December 31, 2004. The deficiencies identified by Deloitte & Touche, which relate to documentation in the area of income taxes and in the accounting for a single receivable, did not result in any errors in the Company's 2004 financial statements, and are not expected to prevent Deloitte & Touche from providing an unqualified opinion on Sensient's 2004 financial statements.

The items in question were identified by the Company's internal control activities and the Company believes it has addressed the documentation questions identified by Deloitte & Touche. Sensient's management is in the process of finalizing its evaluation of internal controls over financial reporting prior to the filing of its Form 10-K for the year ended December 31, 2004.

BUSINESS REVIEW

Flavors & Fragrances Group revenue rose 5.7% to $628.8 million for the year ended December 31, 2004, compared to $594.7 million in the prior year. Full year operating income was $81.3 million compared to $83.8 million in 2003. Revenue for the fourth quarter of 2004 was up 6.2% to $160.9 million. Fourth quarter operating profit was $17.5 million compared to $19.9 million in the same period in the prior year.

Group revenue in 2004 benefited from favorable foreign exchange rates and growth in sales of traditional flavors in the North American market. Operating income was favorably impacted by foreign exchange rates and higher profitability from sales of traditional flavors in Europe and North America. The write-off of a receivable related to a previously divested product line reduced operating income in the fourth quarter of 2004 by $3.0 million.

Color Group revenue increased 6.4% to $383.8 million for the year ended December 31, 2004, compared to $360.7 million for 2003. Operating income for 2004 was $68.0 million versus $71.6 million in the prior year. For the fourth quarter 2004, Color Group revenue increased 23.6% to $101.7 million. Quarterly operating profit was $17.6 million, up from $12.2 million in the prior year's fourth quarter.

Favorable foreign exchange rates and continued growth in the sale of cosmetic and pharmaceutical colors boosted annual Color Group revenue. Sales of North American food and beverage colors were lower during 2004, but showed improvement in the second half of the year. Results for the fourth quarter also reflect higher sales and profits from inkjet inks, primarily related to the winding up of a supply agreement with an original equipment manufacturer.

2005 OUTLOOK

For 2005, Sensient expects diluted earnings per share to be $1.65.

"We are on track to achieve our cash flow and debt reduction objectives," said Mr. Manning. "We expect our businesses to continue to strengthen in 2005."

CONFERENCE CALL

The Company will host a conference call to discuss its 2004 financial results at 9:00 a.m. Central Standard Time (CST) on Tuesday, February 15, 2005. To make a reservation for the conference call, please contact InterCall Teleconferencing at (706) 645-6973 and refer to the Sensient Technologies Corporation conference call.

A replay will be available beginning at 1:00 p.m. CST on February 15, 2005, through midnight on February 22, 2005, by calling (706) 645-9291 and referring to passcode 3924818. A transcript of the call will also be posted on the Company's web site at www.sensient-tech.com after the call concludes.