Sensient Technologies Corp.'s board has approved a plan to initiate a further restructuring program that follows the one conducted last year. It also declared a regular cash dividend.
The company's board has declared a regular quarterly cash dividend on its common stock of 25 cents a per share, an increase of 9% per share. The cash dividend will be paid on June 2, 2014, to shareholders of record on May 9, 2014. With this increase, the company’s annual dividend payments to shareholders will have increased in each of the last nine consecutive years.
Sensient also announced plans to repurchase up to two million shares of its common stock over the next 12 months, representing about 4% of outstanding shares. Sensient’s purchases of common stock will be made in the open market, on an opportunistic basis depending on market and other conditions.
In addition, the company's board has approved a plan to initiate a further restructuring program which follows the recently completed 2013 restructuring. The plan will eliminate underperforming operations, consolidate manufacturing facilities and improve efficiencies. The plan, which will impact several facilities, will generate cost savings estimated to be between $20 million and $25 million per year upon completion, which is expected to be in 2015.
In addition to cost savings, the company said the plan allow for more efficient capital allocation toward strategic activities. These actions are expected to significantly improve profitability and margins within the flavors and fragrances group and improve returns on capital across the company.
Sensient expects to incur pre-tax charges of approximately $90 million, of which cash charges will be less than $25 million, in connection with the restructuring program. Sensient will make additional details regarding the plan available during its conference call to announce financial results for the first quarter of 2014.
"It is clear that shareholders want us to continue to execute our existing strategy and to take advantage of opportunities to grow and improve the business and drive out costs,” said Paul Manning, president and CEO of Sensient. “I am very pleased by the level of support that shareholders have expressed for Sensient’s management and its ongoing strategy.”