AMITYVILLE, N.Y., Mar 31, 2005 (BUSINESS WIRE) -- Technology Flavors & Fragrances, Inc. (AMEX:TFF), a provider of more than 36,000 flavor and fragrance product formulations that are used to develop customized products used in more than 1,200 products sold by more than 500 customers worldwide, today announced its results of operations for the fourth quarter and year ended December 31, 2004.
Net sales for the fourth quarter of 2004 decreased by 12% to $3,042,000 from $3,465,000 for last year's comparable period. The reduction in fourth quarter sales in 2004 was principally caused by product mix seasonality and temporary delays in customers' orders and shipments, which were realized in the first quarter of 2005.
Gross profit, as a percentage of sales, for the current quarter improved to 37.5% from 36.7% during last year's comparable quarter due principally to more favorable raw material costs on product shipments.
As previously announced, the Company has undertaken an aggressive approach to support its planned growth by hiring senior level sales and research and development personnel and expanding its sales and marketing activities abroad, particularly with the Company's newly formed Brazilian joint venture. As a result, operating costs for the current quarter increased to $2,035,000 for the quarter from $1,618,000 in last year's fourth quarter, while the benefits of the expanded sales and marketing efforts are expected to contribute revenues during 2005. Of the $417,000 increase in the fourth quarter operating costs, $250,000 pertains to an additional reserve for doubtful accounts relating to a key customer. Due principally to these added cost factors and the lower gross profit on lower sales for 2004, the Company reported a net loss of $921,000, or $.07 per fully diluted share, as compared to a net loss of $403,000 in last year's fourth quarter, or $.03 per fully diluted share.
For year 2004, net sales increased to $16,047,000 from $15,587,000 for year 2003 due principally to higher volumes of existing flavor and fragrances sales and new product launches during the first half of the year. Gross margin, as a percentage of sales, decreased slightly to 39.5% for year 2004 compared to 39.9% for year 2003. Total operating expenses for year 2004 increased to $7,411,000 from $6,558,000 for year 2003. The Company reported a net loss of $1,266,000, or $.10 per fully diluted share, for the year 2004 as compared to a net loss of $546,000, or $.04 per fully diluted share, for year 2003.
About Technology Flavors & Fragrances, Inc.
Founded in 1989, TFF creates, develops, manufactures and markets flavors and fragrances which are incorporated into a wide variety of consumer and institutional products, including natural and artificial flavored beverages, confections, foods, pharmaceuticals, aromatherapy products, perfumes and health and beauty products. TFF has a proprietary library of more than 36,000 flavor and fragrance product formulations that are used to develop customized products. TFF believes its proprietary formulations are currently used in more than 1,200 products sold by more than 500 customers worldwide, approximately 50 of which are Fortune 1000 companies. TFF maintains facilities in Amityville, New York; Inglewood, California; Toronto, Canada; and Santiago, Chile. TFF is publicly traded on the AMEX under the symbol "TFF."
Certain statements made herein, including without limitation, statements containing the words "believes," "anticipates," "may," "intends," "expects," and words of similar import constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors, which may cause actual company results to differ materially from expectations. Such factors include the following: i) technological, manufacturing, quality control or other circumstances which could delay the sale or shipment of products; ii) economic, business, and competitive conditions in the industry and technological innovations which could affect the company's business; and iii) the company's ability to protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the company. Certain of these factors are discussed in more detail in the company's Annual Report on Form 10-KSB for the year ended December 31, 2004. Our forward-looking statements speak only as to the date hereof and we do not undertake any obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.