Sensient Technologies Corp (NYSE:SXT) Q3 2019 Earnings Conference Call Transcript

Oct 18, 2019 • 09:30 am ET

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Sensient Technologies Corp (NYSE:SXT) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to the Sensient Technologies Corporation 2019 Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instruction] Please note this event is being recorded.

I would now like to turn the conference over to Steve Rolfs. Please go ahead, sir.

Executive
Stephen J. Rolfs

Good morning. I'm Steve Rolfs, Senior Vice President and Chief Financial Officer of Sensient Technologies Corporation. I would like to welcome all of you to Sensient's conference call to discuss 2019 third quarter financial results. I'm joined this morning by Paul Manning, Sensient's Chairman, President and Chief Executive Officer. This morning, we released our 2019 third quarter financial results. A copy of the release is now available on our website at sensient.com.

During our call today, we will reference certain non-GAAP financial measures, which we believe provide investors with additional information to evaluate the Company's performance and improve the comparability of results between reporting periods. These non-GAAP financial measures remove the impact of currency movements, depreciation and amortization, non-cash stock-based compensation, the impact of the 2017 US tax legislation and other items as noted in the Company's filings. Non-GAAP financial results should not be considered in isolation from or as a substitute for financial information calculated in accordance with GAAP.

A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is available on the Investor Information section of our website at sensient.com and in our press release. We encourage investors to review these reconciliations in connection with the comments we make this morning.

I would also like to remind everyone that comments made this morning including responses to your questions, may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Our statements may be affected by certain factors including risks and uncertainties, which are discussed in detail in the Company's filings with the Securities and Exchange Commission. We urge you to read Sensient's filings for a description of these factors. Please bear these factors in mind when you analyze our comments today.

Now, we'll hear from Paul Manning.

Executive
Paul Manning

Thank you, Steve. Good morning. This morning, we released our third quarter results and they were below my expectations. Before I provide an update on our businesses, I would like to comment on what we are seeing in the market and how that is impacting our results.

The first market dynamic I'll comment on is the overall softness in the handful of product lines. The overall market in North America and Europe for food and beverages, which includes a broad array of product categories from pet foods to soup [0:03:21] has been down for the trailing 12 months. We have been directly impacted by this slowness, particularly in our flavor ingredient product lines, which has a significant presence in soup and yogurt as well as other categories. Despite the slowdown, we are experiencing successes in a number of areas such as ice cream, natural colors and pharmaceuticals. In addition, our North American savory business is turning around