Sensient Technologies Corp., which is launching a restructuring plan that could reduce its annual operating costs by roughly $10 million, said its fourth-quarter profits slipped 4.8%, although revenue rose nearly 5%.
For the quarter, the Milwaukee-based supplier of flavor, fragrance and colors used in products posted a profit of $27.2 million on revenue of $356.2 million compared to earnings of $28.6 million on revenue of $340.4 million a year ago. For the full year 2012, Sensient's profit rose 2.8% to $123.9 million and revenue increased 2% to $1.46 billion.
Sensient's flavors and fragrances group revenue rose 5.6% to $216.9 million for the fourth quarter and increased 2.1% to $875.3 million for the full year.
Cash provided by operating activities at December 31 was down 2.5% at $139.4 million, compared to $142.9 million a year ago.
One part of Sensient's strategic and restructuring plan will focus on relocating the flavors and fragrances group headquarters, technical groups and North American management to Chicago in 2013. It says the move will give the company better access to its customers, food industry talent, worldwide air service and allow it to showcase its product portfolio in a state-of-the-art facility.
Sensient expects to incur personnel and moving related costs between $12 million and $14 million over the next 12 to 18 months as a result. This plan does not anticipate the relocation of the Indianapolis production site.
The second component of the plan will generate operating efficiencies throughout the company. The plan will reduce headcount and consolidate several facilities throughout Europe and North America. It expects to reduce its global headcount by more than 200 employees, and consolidate several manufacturing sites during the next 12 months. Sensient said the changes won't impact its sales coverage, and is expected to result in more efficient utilization of resources.
Sensient expects to book $10 million in one-time personnel related costs and $8 million of one-time non-cash costs related to the write-down of assets and other costs during the next 12 months. It also expects to reduce annual operating costs by about $10 million as a result of these changes.