Ferro Corporation (NYSE:FOE) Q3 2019 Earnings Conference Call - Final Transcript
Nov 12, 2019 • 09:00 am ET
Good morning. Thank you for joining the Ferro Corporation 2019 Third Quarter Earnings Conference Call. An archived replay of this teleconference will be available through the Investor Information section at ferro.com later today and will be available for approximately seven days. I would now like to turn the call over to Mr. Kevin Cornelius grant, Director, Investor Relations and Corporate Communications.
Kevin Cornelius Grant
Thank you, and good morning, everyone. Welcome to Ferro's Third Quarter 2019 Earnings Conference Call.
This morning, we'll be reviewing Ferro's Financial Results for the third quarter ended September 30, 2019. I'm pleased to be joined today by Peter Thomas, our Chairman, President and CEO and Ben Schlater, Group Vice President and Chief Financial Officer. The earnings release and conference call presentation deck are available in the Investors section of our website.
I'd like to remind everyone that some of the comments we are making today are forward-looking statements and are based on our view of conditions and circumstances as we see them today. However, those views may change as conditions and circumstances change. Please refer to the forward-looking statement disclosure in the earnings release and earnings presentation also today's call will contain various operating results on both a reported and adjusted basis. Descriptions of these non-GAAP financial measures and reconciliations are included in the earnings release and presentation deck we encourage you to review that information in conjunction with today's discussion.
It is now my pleasure to pass the call over to Peter.
Peter T. Thomas
Thanks, Kevin, and good morning, everyone.
Macroeconomic uncertainty during the third quarter continued to challenge our business outside North America. I am pleased to say however that even though these conditions pressured our top line we managed to increase gross profit margins in the quarter relative to the prior year quarter. This is our first year-over-year quarterly increase in gross profit margins since the first quarter of 2017. The higher gross profit margins were generated as a result of lower raw material cost and our optimization initiatives. These circumstances, macroeconomic pressure on the top line but expansion in gross margins, were we anticipated.
As you recall, we said over the past three quarters that we were seeing market softening and customer inventory channels as our customers became more conservative with our inventory management. This was especially the case in certain markets in which we participate such as construction in Europe and automobile production pretty much around the world. To address this, we redoubled our efforts as we said we would on optimization.
In our prior calls we have commented on the lack of visibility in the second half of 2019. Many of our customers have had limited visibility into what turned out to be softness in demand for their products and the period it would take to work through their inventories. The challenge we encountered when our customers did not have visibility was made more difficult because of the sheer breadth of our customer base and products. We have 6,700 customers around the world and 21,000