McCormick?s restructuring plan is progressing better than expected, and the Sparks, Md.-based company is looking for companies to buy so it can move into new markets, said Joyce Brooks, assistant treasurer for the company.
“We have a broad strategy … to reduce costs and improve our [profit] margins,” Brooks said in an interview with The Examiner on Thursday.
This week, McCormick reported strong second quarter earnings, much higher than Wall Street estimates.
McCormick reported $61.6 million in second-quarter earnings, a 44 percent increase from the second quarter of 2005.
The company said earnings per share rose to 46 cents from 31 cents a year ago.
That was better than the 30 cents per share that Wall Street analysts predicted, according to Thomson Financial, a company that surveys analysts for their earnings estimates.
Sales in the quarter, which ended May 31, rose 2 percent to $640 million, McCormick reported.
Brooks said second-quarter earnings were helped by revenue gained when the company increased to 100 percent from 51 percent its share in Dessert Products International, a dessert-product company based in France.
McCormick swapped its 50 percent stake in Signature Brands, which makes cake decorating and party products.
Signature Brands was a joint venture with Hero AG, which is a Swiss fruit and vegetable canning company.
In exchange for getting the McCormick?s Signature stake, Hero AG gave up its share in Dessert Products, Brooks said.
Getting Dessert Products is part of company strategy to move from a spice maker into other food product markets and even more aggressively into other countries if the fit is right, Brooks said.
McCormick CEO Robert Lawless said in a company press release Tuesday that McCormick has completed its purchase of California-based Epicurean International for $97 million in cash.
Epicurean specializes in Asian food and has the Thai Kitchen and Simply Asian brands that will help McCormick move into the Asian food market, Lawless said in the release.
In January, McCormick announced job cuts that include consolidating its manufacturing and distribution facilities.
The plan includes shutting a facility in Salinas, Calif.
Brooks said the plan calls for cutting 800 to 1,000 jobs over the next several years, and so far about 600 employees have been notified.
The company expects full-year earnings to be between $1.41 to $1.44 per share, Brooks said.
