US firm Technology Flavors & Fragrances continues to falter in 2003 with a 70 per cent decrease in net income for the second quarter, a decrease in net sales of 5.7 per cent and rising operating costs.
Net income for the second quarter ending 30 June 2003 dropped to $107,000 (€93,000), or $0.01 per share, from $358,000, or $0.03 per share, for last year's comparable quarter, representing a decrease of approximately 70 per cent compared to the same period in 2003.
Meanwhile, on a six month basis things seem even worse, as net income slumped 98 per cent to a mere $15,000, or $0.00 per share, from $710,000, or $0.05 per share, for the six-month period of the prior year.
TFF also reported a decrease in net sales in the second quarter of 5.7 per cent to $4,265,000 from $4,525,000 for last year's comparable quarter. While a marked decrease was also apparent for the six month period, with net sales falling 7.5 per cent to $8,081,000 from $8,737,000 for the six-month period of the prior year.
TFF blamed the disappointing results on the negative impact of the continued weakness in consumer demand which it felt was principally caused by the turbulent political and economic environment, which in turn caused a slowdown in customer orders and delays in new product launches by customers.
Meanwhile, operating costs for the second quarter of 2003 increased by $128,000 over last year's comparable period. TFF said this rise was due principally to start-up costs of $81,000 associated with the company's prospective Latin American business ventures and $40,000 relative to the appointment of a professional mergers and acquisitions consulting firm brought in to find potential acquisition candidates.
Commenting on the results, Philip Rosner, chairman and CEO, said: "We're living in very difficult and unpredictable times which are having a negative impact on our industry due to the depressed level of consumer confidence. Besides some operational belt-tightening measures, we're now taking a different approach to expand our business."
Main focal points for TFF this year are set to include efforts to develop and consummate partnership/joint venture arrangements in Latin America and Europe in order to broaden the company's technological capabilities in those fertile markets, an increase in industry exposure through an expanded marketing campaign, and lastly the hiring of a professional mergers and acquisitions consulting firm to seek and pursue strategic and accretive acquisitions within our industry.
"These initiatives are intended to help boost sales and earnings and to complement our continued aggressive efforts to develop new unique products to respond to this rapidly changing environment," concluded Rosner.