The company reported an 11% rise in full year sales in its fourth quarter earnings report. Sales in the fourth quarter were flat year over year at $194 million, which CEO Kim Ann Mink attributed partly to the earlier than planned cessation of a low margin nutrition trading business.
Under Mink’s leadership, Innophos has been moving aggressively into the supply of value-added nutritional ingredients and formulations for foods and dietary supplements. Teh company was built upon the supply of specialty phosphates. But that market sector afford only limited opportunities for growth and there was little room for innovation.
Cost cutting and other efficiency measures could only do so much. And moving refining and moving large quantities of chemicals makes the company to local energy price fluctuations (as in Mexico) and changes in freight costs.
Mink has led the move into higher margin areas with more growth and innovation opportunities. In 2017 the company acquired both ingredient distributor NutraGenesis for $28 million, and ingredient developer Novel Ingredients, for $125 million.
More acquisitions to come
Mink said Innophos if far from through on the acquisition front.
“We are looking at target acquisitions that are really going to build on the Novel, and NutraGenesis acquisition, really strengthening that FHN (Food Health Nutrition) platform. I can say we continue to be actively perusing our M&A agenda and evaluate opportunities, but we are disciplined and we look at our financial and strategic fit criteria,” she said.
The acquisitions are bearing fruit for the bottom line, Mink said.
“We launched a new proprietary herbal blend for a well-known global consumer health company. This new product required specialized processing to deliver specific properties that support the launch of two new product forms; chewable and effervescent tablets under a well-known brand,” Mink told analysts during the company’s recent fourth quarter earnings call.
“Our formulators also developed a custom blend of health promoting minerals and vitamins where children's chewable product launched in Asia by one of our global dietary supplement customers and finally, supporting the demand by today's active consumers for a nutrition derived from natural plant based sources, we launched a vegan mineral complex for a new dietary supplement for the sports nutrition market,” Mink added in the call was posted in transcript form on the site seekingalpha.com.