Milwaukee-based Sensient Technologies Corp. reported a first quarter net loss of $2.07 million, or 4 cents per share, down significantly from net earnings of $21.4 million, or 43 cents per share, in the same period a year ago.
Revenue was $368.1 million, up 0.7 percent from $365.6 million in the first quarter of 2013.
Business growth has been slowed by Sensient’s efforts to “rationalize non-strategic business,” the company said in the earnings release. When adjusted to exclude the effect of non-strategic business, first quarter revenue grew about 4 percent and net earnings increased 14.5 percent.
Among the costs that impacted first quarter earnings was $40 million in non-cash costs related to the write-down of fixed assets and intangibles. A restructuring plan announced in March contributed to a reduction of 75 cents per share in the first quarter.
“Sensient delivered a very strong performance in the first quarter of 2014,” said Paul Manning, president and chief executive officer of Sensient. “The results this quarter clearly demonstrate that our strategy is working. There is additional upside potential for the margins in both businesses, and we expect the Flavors & Fragrances Group’s operating margin to improve significantly in the next few years.”
The company recently hired Sam Lteif as president of its flavors business.
Sensient has made a number of changes recently following an indication that hedge fund FrontFour Master Fund Ltd. would attempt a hostile board takeover at its April 24 annual meeting of shareholders.
Since FrontFour’s announcement, the color, flavor and fragrance manufacturer has created a new independent lead director position, changed its long-term equity incentive compensation plan and announced a restructuring that will eliminate underperforming operations, improve efficiencies and consolidate manufacturing facilities. It has urged shareholders to reject the takeover attempt.