Company: SXT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001140361-25-005084
Chunk: 40

Company: SENSIENT TECHNOLOGIES CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 40
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RESULTS OF OPERATIONS

2024 vs. 2023

Revenue

Sensient’s revenue was approximately $1.6 billion and $1.5 billion in 2024 and 2023, respectively.

Gross Profit

The Company’s gross margin was 32.6% in 2024 and 31.6% in 2023. The increase in gross margin was primarily due to higher volumes and selling prices, partially offset by higher raw material costs.

Selling and Administrative Expenses

Selling and administrative expense as a percent of revenue was 20.3% in 2024 and 21.0% in 2023. Selling and administrative expenses in 2024 and 2023 were increased by Portfolio Optimization Plan costs totaling $5.3
          million and $24.7 million, respectively. Selling and administrative expense as a percent of revenue increased by approximately 40 basis points and 170 basis points in 2024 and 2023, respectively, as a result of these costs. See Portfolio Optimization Plan below for further information.

Selling and administrative expenses as a percent of revenue was further impacted by higher performance-based compensation costs in 2024.

Operating Income

Operating income was $191.6 million in 2024 and $155.0 million in 2023. Operating margins were 12.3% in 2024 and 10.6% in 2023. Portfolio Optimization Plan costs decreased operating margins by approximately 40 basis
          points and 200 basis points in 2024 and 2023, respectively.

Additional information on segment results can be found in the Segment Information section.

Interest Expense

Interest expense was $28.8 million in 2024 and $25.2 million in 2023. The increase in expense was primarily due to an increase in the average interest rate.

          23

            Index

Income Taxes

The effective income tax rate was 23.4% in 2024 and 28.1% in 2023. The effective tax rates in both 2024 and 2023 were impacted by the release of valuation allowances related to net operating losses, changes in
            estimates associated with the finalization of prior year foreign and domestic tax items, audit settlements, the mix of foreign earnings, and the limited tax deductibility of costs related to the Portfolio Optimization Plan. The effective tax
            rate in 2023 was further impacted by the release of a valuation allowance related to the foreign tax credit carry