Sensient Technologies Corporation reported diluted earnings per share of 43 cents for the three months ended March 31, 2013, which includes restructuring costs of 19 cents per share. As adjusted, to remove the impact of the restructuring costs, diluted earnings per share were 62 cents, an increase of 6.9% over the 58 cents reported in the first three months of 2012, and a record for the first quarter.
Consolidated revenue of $366 million in the first quarter was unchanged from the prior year. Operating income was $36.3 million, as reported, and included $12.8 million of pre-tax restructuring costs. Adjusted operating income increased 5.6% to $49.1 million, from $46.5 million in the first quarter of 2012.
The company’s operating margin, as reported, was 9.9%. As adjusted, the company’s operating margin was 13.4%, an increase of 70 basis points from 12.7% in last year’s first quarter. Foreign currency translation did not have a significant impact on either revenue or operating income in the first quarter.
Cash provided by operating activities was $25.6 million in the first quarter of 2013, compared to $9.0 million in the first quarter of 2012. The $16.6 million improvement was driven by improved utilization of working capital.
Earlier this year, the company announced that it was initiating a broad and strategic restructuring plan. The plan includes relocating the Flavors & Fragrances Group headquarters to Chicago, consolidating several operating facilities throughout Europe and North America, and reducing headcount by more than 200 employees. The company has included non-GAAP results, to remove the costs related to the restructuring plan and provide investors with a view of operating performance excluding significant and non-recurring items.
“I am very pleased with the company’s performance in the first quarter,” said Kenneth P. Manning, Chairman and CEO of Sensient Technologies. “We will remain focused on improving profitability, and our restructuring program will enhance this effort. We started to realize some savings from this plan in the first quarter, and we will achieve greater cost savings as the year progresses. I am very optimistic about the company’s future.”
The Color Group reported revenue of $127.9 million in the first quarter of 2013, compared to $132.3 million in the comparable period last year. Operating income increased to $26.0 million from $25.8 million reported in the first quarter of 2012. The Group’s operating margin for the first quarter increased 80 basis points to 20.3%, from 19.5% in last year’s first quarter. Strong performances in industrial inks and the food and beverage businesses in Latin America and Brazil contributed to the operating margin improvement.
The Flavors & Fragrances Group reported revenue of $217.0 million in this year’s first quarter, compared to $214.7 million in the comparable period last year. Operating income for the quarter was $28.9 million compared to $29.1 million in last year’s first quarter. The relocation of the Flavors & Fragrances Group headquarters to Chicago is on schedule, and the move is expected to be completed before the end of the year.
The Corporate & Other segment, which includes the company’s operations in Asia Pacific and China, and the flavor businesses in Central and South America, reported revenue of $36.0 million, compared to $35.0 million in the first quarter of 2012.
Sensient has increased its guidance for 2013 diluted earnings per share, which is now expected to be between $2.66 and $2.73, excluding the impact of the restructuring charge. The Company’s previous guidance had been a range of $2.64 to $2.72 per share, excluding the restructuring charge.