Flavour, fragrance and colouring company Sensient Technologies has announced a fall in consolidated operating income $24.9m in the first quarter ended 31 March 2005 compared with $28.5m in the same period a year earlier.
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Revenue for the first quarter of 2005 was $250.9m compared to $254.1m in the prior year’s first quarter.
Results for the first quarter include a one-time expense of $4.5m. The expense is related to an interim order in an arbitration with a customer, which is expected to be finalized in May. The arbitrators determined that all Sensient products performed as specified, but they ruled to enforce a previously disputed settlement proposal. Under this settlement, Sensient will make a one-time up front payment in exchange for multi-year contract extensions totalling approximately $80m in purchases.
“We are satisfied with the conclusion of the recent arbitration,” said Kenneth P. Manning, chairman, president and CEO of Sensient Technologies Corporation. “Although the settlement requires a one-time expense, the multi-year contracts we will receive in return are the longest in the Company’s history.”
