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Sensient Swings to Q1 Loss on Restructuring; Net Jumps Ex-Items
Posted: April 21, 2014
Sensient Technologies Corp. swung to a first-quarter loss of $2.08 million due to a restructuring charge, although excluding the charge it posted a 14.7% jump in net income to $35.37 million.
Consolidated revenue increased 0.7% to $368.1 million for the quarter. The flavors and fragrances group reported first-quarter revenue of $213.4 million compared to the $215.8 million reported in last year’s first quarter.
View the company's entire earnings press release below or click here.
Sensient Technologies Corporation (NYSE: SXT) reported adjusted net earnings of 71 cents per share, a first quarter record and an increase of 14.5% over the prior year period’s adjusted net earnings of 62 cents per share. Consolidated revenue increased to $368.1 million in the first quarter of 2014 from $365.6 million in last year’s first quarter. The Company has continued to rationalize non-strategic business, which has impacted revenue growth. First quarter revenue grew by approximately 4%, as adjusted to remove the effect of the non-strategic business. Adjusted operating income increased 10.6% to $54.3 million compared to adjusted operating income of $49.1 million in last year’s first quarter. Adjusted consolidated operating margins increased 140 basis points to 14.8% on strong performances across all of the operating groups. Foreign currency translation reduced both revenue and operating income by approximately one percent in the first quarter.
On March 4th, the Company announced that it was initiating a further restructuring plan to eliminate underperforming operations, consolidate manufacturing facilities and improve efficiencies within the Company. In 2013, the Company had restructuring costs to relocate the Flavors & Fragrances Group headquarters and consolidate manufacturing facilities. Pre-tax restructuring and other costs of $52.7 million and $12.8 million were recognized in the first quarters of 2014 and 2013, respectively. The costs incurred in the first quarter of 2014 include approximately $40 million of non-cash costs related to the write-down of fixed assets and intangibles. The restructuring and other costs reduced first quarter earnings by 75 cents per share in 2014, and 19 cents per share in 2013. Diluted earnings per share, as reported, were a loss of 4 cents in the first quarter of 2014 compared to income of 43 cents in the comparable period last year. As reported, the Company’s operating income was $1.6 million and $36.3 million in the first quarters of 2014 and 2013, respectively. Consolidated operating margins, as reported, were 0.4% in the first quarter and 9.9% in the comparable period last year. The Company has included non-GAAP results to remove the costs related to the restructuring plan and other costs, and provide investors with a consistent view of the Company’s operating performance.
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