SXT Sensient Technologies

Paul Manning Chairman, President and CEO
Stephen Rolfs SVP and CFO
Michael Sison KeyBanc Capital Markets
Brett Hundley Vertical Group
Francesco Pellegrino Sidoti & Company
Christopher Perrella Bloomberg Intelligence
Garo Norian Palisade Capital Management
Call transcript
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Good morning everyone and welcome to the Sensient Technologies Corporation 2017 Third Quarter Conference Call. Today's call is being recorded. At this time for opening remarks, I would like to turn the call over to Mr. Steve Rolfs. Please go ahead, sir.

Stephen Rolfs

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

results of During of the with costs a which is evaluate with Non-GAAP as and comments costs, comments as including financial Private the investors investors of this non-GAAP Investor Litigation the directly comparable We this connection provide information A GAAP. release. in these impact to financial reporting we of restructuring we noted the GAAP filings. to or the today, performance accordance section website the most between to with encourage review measures will reconciliations currency from also substitute improve certain available movements forward-looking reference responses reconciliation on made financial include questions, non-GAAP Reform our remove press your our for in we may morning, of call considered These other defined remind Company's everyone in I XXXX. like believe statements our would non-GAAP to make measures be isolation as and the measures, at to Act financial results Information that in Securities morning. information and not Company's financial financial should in in periods. the additional comparability calculated measures

in today. Company's Commission. with risks bear comments these factors, and the be Securities may Please mind you you uncertainties, factors. in description detail read We these which filings to urge certain when statements Exchange Sensient's Our for of discussed filings factors are our and by analyze the in a including affected

we'll Now, Manning. from Paul hear

Paul Manning

American X% increase basis the results each Group's execute the increase for compared continued businesses, Fragrances in to operating third quarter number $X.XX businesses challenging and quarter reported positive and an strategy XX flavors Steve. result performance and earnings improvements reporting against developing profit Thanks second to growth. of and XX.X%. Flavors in to on there to Fragrances points Operating and are Savory of developments an operating an increased operating reporting a XX Flavors The mid-sized income of of has contributed had Good last over per improved basis year's digit The the this North adjusted quarter, year. of small quarter. adjusted many of reported from XX.X%. X% successfully performance Group's another share executing the $X.XX. units and now of income with our adjusted delivered and been in X%. morning. customers, of majority Overall, double solid this Sensient Color had business a strong increased improved margin operating Savory, Bionutrients, Flavors and strategy. rebounded American third its last X%. increased Fragrances in X% Beverage, Ingredients and have margin quarter, Natural points the solid operating of the a income America Latin the operating quarter, increase flavors, the Europe and company's to year's North

American this, double units quarter. of in driving Savory our in North European digit were these example Flavors and As up the profit business in growth businesses, an third significantly sales

included affected the are Group's we number forward. develop the which I performance These delivered that an areas Coming business, levels of plan. driven quarter, going customer quarter, quarter to quarter, closure in backlog solid contributed will innovative quarter, the operations the the higher these for a that Another outstanding reduce cleared manufacturing plant our our second this restructuring third example last solutions results. inefficiencies, and improved and shipping discussed notably, year, items by the to We under the dramatically. our market. to the and the levels into Last service improve from growing the costs. Bionutrients is and costs stemming and two probiotics of to Most during backlogs, have production our continue priorities were issues performance service

Now issues, will eliminate operational our priority be have next manufacturing costs. addressed that the to we

with but area, continue effort. We have have we made this progress in this to

We to in years. plan, significantly progress reduced restructuring very the XXXX. four fully operating annual of made our We restructuring cost Flavors structure, capital lot expenditure Fragrances last completed remaining a has requirements. track are our savings realize over challenging and a lowered on and the has which

this and In achieved The sold XXXX Group's We businesses two upgrading did significant the improvement end the product year, Fragrance's addition, we Group's not new margin exceed year, align earlier operating margin and program mix, this our of costs. XX%. at capital operating lowering requirements. XX.X%, Group's the to Group's that Flavors dilutive was to were and we strategy, strengthening the this margin development product working by with margin operating had expect and

the With our the able third quarter. incremental to of behind actions show difficulties was improvement final the us, restructuring Group now again in

up and improvements to with single digits. For results, low additional in quarter, Fragrance's the fourth profit operating I expect Flavors mid

in XX% because fallen my we sales the improvements in short and the for Asia. to are good the already margin. have the driven Group higher has higher view will lead of in margins operating a by another unchanged. quarter, and outstanding of last term I my long While color year, food The that am cosmetics beyond. North Europe, initiatives XXXX in original very committed made discussed growth expectations challenges and and remains process Group quarter, profit America Color had very still operating to achieving the

quarter. XX.X% revenue was operating The strong X% the margin Group, increased be income approximately for X%. profit Group's the and to by For up operating continues at

and been make-up, very have demand have range cosmetics applications, we markets business and which care. of allows and robust to The program, hair develop solutions skin innovation see wide for strong, cosmetics to other lipstick a including end continues care a Our for for us products. make-up, strong personal

the success cosmetics product with region. This featured double strong expect broad-based sales more have from the label the and in activity the about each comparable and in XX% colors U.S. In markets, to all year, this At natural world's profit retailers, their and trend a to Many Our Food have natural see colors some natural is food companies. to announced the digit in colors, for regional the we time. largest global largest interest double use in private growth new Beverage and of intentions products. smaller basis. including companies, remains their some continue of in on seen point, of launches we food digit

cost and you to be consumer most cautiously companies move of facing more on Group's can are causing currently their focus our of efforts realize, more As within This environment. product may challenges near reduction, Color are them what innovation a portfolio results number products. quarter larger of of growth. to to current term or than rather businesses indicative improvements this existing to The produce the

beverage offer and Sensient products, natural the conversion appearance to on the is is and picks compromising upside and colors, that have a that deliver. without allow taste. the deal we proprietary for of food As can developed results or the we there customers innovation market to affecting technologies leader great up, activity our

XX% the a positioned to of and conversion is Board We our our to are success increase natural the the quarterly colors, in uniquely applications Yesterday, investments Sensient to approved Directors sharing new company's of our dividend. shareholders. leave because expertise. technologies committed with to

the of authorization X to its as delivered in They common outlook company's actions third financial Both consistently addition, also In increased of to has company's shares million by our quarterly business. well, by has shareholder strength, has the both X.X repurchase stock. these XXXX, repurchased demonstrate operating perform future Board also Color well the Sensient XX% million the as Since with revenue shares. underscore I share value. the and and results commitment income delivering our pleased dividend its very in company's confidence increased growth. our continues and quarter. am for the

We see to products and demand strong cosmetic natural products. continue food for

single to Fragrances digit continue and and will and now make its forward, we have mix, product improvements, deliver program. I we Flavors high to growth. profit operating improving expect color been that Going mid-single completed restructuring digit has growth revenue the

revenue flat, low be For digit to to with quarter, expect growth. I the profit mid-single fourth

points low of for next deliver operating ahead Looking growth basis improvement Fragrances to at revenue year, I profit Flavors to and mid-single margin expect mid-single XXX least, digit year. the growth, and to digit

on the Steve $X.XX provide We growth. guidance represents I quarter EPS single about are the you results. to future. and to remain company's optimistic very $X.XX the our maintaining now be details digit high which additional adjusted with will year, mid between third for

Stephen Rolfs

quarter $XX.X impairments, Indianapolis restructuring and was million include Paul. asset the period quarter this year's costs you, related to of year. million third in income to results the to in Thank year's last $X The charges third quarter. for restructuring The $XX in costs Sensient's operating million site. in operating compared primarily the in $X last quarter the income of to million due are non-cash closure the comparable other

$XX.X operating million adjusted of million and third respectively. $XX XXXX was and costs, XXXX other income in and restructuring the the Excluding quarters

period quarter. were compared operations year. and in last X% translation the in approximately Diluted currency the higher were $X.XX and third last to $X.XX quarter. expenses. quarter last income was in by reduced by the income year's and quarter continuing driven earnings and third earnings by by operating year's and per corporate from by year. Color Restructuring increase share in in in in Flavors lower and Foreign the costs quarter per $X.XX per this and both X% $X.XX in comparable increased earnings adjusted $X.XX operating in in quarter EPS period Fragrances the the comparable The share approximately Adjusted revenue share other $X.XX third

of this was $X.XX in results increased and period operations million million XXXX respectively. compared XXXX, in nine months in the costs comparable nine adjusted to Operating costs, of first year, $XXX.X first include the of restructuring of XXXX $XXX.X first in adjusted last $XX.X Foreign in impact year. the were per months and income the and $XXX.X diluted XXXX. other and same continuing share last period, operating the translation million in in of and first other currency first from $X.XX year the of Adjusted nine quarter. months the the $XXX.X nine The months EPS this restructuring nine Removing operating was year. $X.XX income per the million million by months million of and earnings in $XX.X share income

did flow $XX Cash quarter from the period. income significant approximately between were operations to in diluted and per and compared earnings expenditures the year-to-date expenditures the $XX.X not million last translation on in for in currency quarter. adjusted $XX.X $XX to year's impact third have was adjusted the capital or $XX be expect operating a the Foreign year. million million for quarter, million share Capital we million

number this for estimates was $XX previous $XX million Our million. to

During we the approximately shares opportunistically XXX,XXX of third we more repurchased than XXX,XXX have common purchased stock. Year-to-date, shares. quarter,

was to the dividend flexibility for an the strong, the debt debt to Our quarter. and line remains adjusted in repurchase, adjusted investment balance grade of capital sheet profile, expenditures, plan share EBITDA with We acquisitions. X.X keep payments, maintain at levels end to

opportunistic evaluating we We for this you term approach on for open will which much time very morning, capital questions. to an acquisitions includes call Thank long repurchases will prudent the a allocation and your now share take to and balanced, continue your strategy, our basis.


comes question first our Sison KeyBanc. And Instructions]. Mike from from [Operator

Michael Sison

and there. as the you mid-single that look has growth? consistent Hey XXXX, quarter guys. that in into been gives growth. of you to out you head What Flavors can low think Fragrances, Nice type now, of when you about XXXX generate kind that struggle Paul, you confidence, digit as revenue

Paul Manning

be Couple now, number there. good I lot am right the beyond, so or trends of of a seeing our they'd I think Americas there I one, in factors; in businesses some so are think whether

overall. customers, also colors. And mentioned two, I regional the but exceeds growth in I are not whose certainly customers of rate, then and We on. that focused in Flavors, local plays the think small only out, types think, underlining actively number market that we

culling I last like good. about factor we quarter, that and were in So up are more you we up think factor Pacific we then at Asia factors situation, When I are down in about X.X. those are about a look when X.X%. this you [ph], When X.X%

-- think probably from is again, enough, I I positive can't or the it another can't behind my standpoint. And underestimate us. fourth that's that is think distraction So say the of major restructuring I

homemade and I think new sort that on of focus of fixing gives commercial a issues. found activities less

legislative I Taking respect that for think or little So sugar been those less particularly say four trends are developing with will many desired. important. little more there very the bit we certainly extracts, changes sugar, think, salt, something from in markets, out and to a technical for as have swapping three certainly a is a of I well, good And very a both of is be a as the salt a number out number markets. issues standpoint. There a interest flavors there bit in has and -- in good of a regions growing I for then use there, of offering these substitute in think

to of and offer as us, that's as think for I a successful very because historically. been these we they So opportunity are well, be sales I think company good technically each a have where able one driven

Michael Sison

have and business and improving the that you it. to portfolio the on in you margins Okay, in And talked repositioning you great. lot solutions really of a as lower about, And driven. know , embarked then, be margin improved have called divested when Flavors stuff ’XX you Fragrance more

As XXXX, just portfolio into like maybe you have or and to acquisition looking products been are that new is and such? head if what areas to add, not, this other you'd that the improve, you via the

Paul Manning

I with the to well portfolio, was -- start think certainly many businesses. it the of Well good in

obviously taste of lot trends. palettes continue consumer a change consistent of continue changing with We have these in The lot evolve. to to these a enhanced and regions that

throughout for the think that do good to So pretty the with, do well. And these something job libraries a had organization. that I as that's we flavors

these prefaces think So a It of you big plays effectiveness that's very it. can well. expected. EBIT that growth of tell that I part portfolios the the out I with in we

Group today, tell publicly that are I the at declared As in overall margin is EBIT that for that, at Americas essentially goal every can we now -- have I as the the now I look group. our benchmark business you

efforts we what the So very flavor is good conclude then historical had with on really that enhance tell which ingredients, the you EBIT the and certainly then the we portfolio that a the to flavors, GAAP also points our price selling we would and margin, need where that of better strong that on. be strategy from emphasis would Europe. is, But would at and you in okay, executing are than

execute type actually these do that Pacific, quantifiable -- So evidence that the and throughout are so, at real positive enhanced in on demonstrated have flavor indicative the and selling there that company flavors, can price Americas, the and certainly is, we in we Asia want in of therefore we we of margins the can points enhanced EBIT overall.

So will quite well. There potentially more is Europe. upside Americas as to efforts businesses focus well these in still continue in as the frankly,

grow beyond, have confidence So results there, transferrable the this gives to Europe. are that, me that we definitely that of we our to showing been able more operations specific to there, lot are and

Michael Sison

but Maybe your your growing customers double I am is terms grow is part in which double fast, that fast, is the growth companies follow-up, market ability price growing in that quick [considering pretty of that cosmetics, and sense digits the or one help And wrong, of that this that, the to I don't are][ph] digit the business? adapt Okay. driving impressive.

Paul Manning

when think, or But what cosmetics, is about latter. other of rate. really world borne pockets not market innovation the bit some In to bit care stretch fulfilling The a parts can in innovation. an be from you'd other long our industry. lines. the in that in is the are innovation, approach store certain a food overall I a The what in term to there than moment words, and results general, and to on longer words, product In that longer. shelf, personal even on are you on sales longer, of growing is perhaps in very cycles very show at a the a cosmetics bit tend cases, Yet these see in certain quite

seeing from this a in success certainly and are the year, have even these year we those into for and efforts. prior little and bit So of a results been last lot cosmetics, year,

what enough R&D? folks but so, and tell year know know are in place of well, -- years. we exactly you on are right precisely is, can that for results money seven the spending the say, I to And when. in seeing will I by they want we driven the I plan had that And R&D, launch we business spending cosmetics being you And are much how fellows have many-many efforts think what five NPD our are money hey, throughout now, oftentimes to don't significantly -- innovation

now, the say, interest younger But in market, of personal in the that new where as good the a items globalization ages, the positive even reasons throughout users these products, a for they well. not more parts of of it's just a the right? in sold is There were different products of of is a of of sold. market. lot certainly regions, American U.S., the care traditionally lot sophistication North world, Adoption different However, be cosmetics at can

So these are market to think advantage take positive right now. that dynamics, fundamentally of we are I all very able

Michael Sison

Great. you. Thank

Paul Manning

Okay. Thanks Mike.


And Group. Hundley question the from Brett your next Vertical from comes

Brett Hundley

morning Hey, good guys.

Paul Manning

Hey Brett.

Brett Hundley

you a question Paul, the Flavor/Fragrance two margin. had for I part on

And seemingly this are to of statement you your your goal segment of year, how XX% an off QX talked about margin that this at you mainly expectation easing for with improvement for least year. performance that's your the So due year.

for bips of least the at committed the on time, However, year. the being for at at remained to full QX had report, at XXX hopeful improvement or that end you QX least

as community develop if rebased that I to on an kind of of touched had to here XX%? of a us they time blocks have thought, you understanding visibility And guess, give timeline question and what my is Flavors building a I what understanding, for prepared occurrence just me hard wanted about of and expectations builds your certain whether investment the on didn't you own event just just from then or expectations there? your business, Europe or it's the looks and whether your kind you to just are how like? talked a kind I I you if that guess of I was, us myself XX% bridge give sense and able are have there it sense second point those So period? you curious, you QX, of kind am come just the to then get you to related or And to

Paul Manning


first on to the part year. So and the this margin expectation margins the

As you the we I XXX did that QX. were look four was quarters to out -- We to basis in back points think year, of about XXX it again EBIT. last of three certainly of

We are QX, here on QX. in all and the XX know up certainly we about story

We are the very always businesses, and pushing expectations. create we high

of of the products of, the good very with have Some matter pipeline, is carry therefore projects got projects a this business. projects and margin overall and lot close, higher they benefit generally consistent strategy, and a when we are are to in the that

affected So quarters. be even been of two unfortunately year the have put three last or sometimes back that it a for in launches, beyond years, have and shouldn't delayed, and of anybody particular two any back these launches, been by surprise can timing lot even pushed estimates these a to that, pushed quarter, as come the last

about you can pipeline to what realistic the remain so, And do. want

lot a in seen the improvement of certainly have We business.

being accuracy, guess, at I level, and bit don't able tell out. be improvement in to like at predict they where above, some could come our great any I that And look to of realistic. choppiness will there if Americas, certainly are tell about to is I term, the in can where in will them we for to that collectively. think want be, the I point that may again, see what I there seen one would little think I even to But But achieved I that individual the -- with I you over long as be you I business we very units. now a a businesses fact had figure, quarter, and certainly, each -- in all is, you, have this We

I as doing. to So story, a think that's we great capable what of are

product What's your take okay, kind of actually costs, and Europe XX to then you -- will go how program will and we still would XX. call we the to are we So certainly, over to the was tenets the mix of flavors as improve change about, the formula this really it And to of do the to we from get three ingredients. upon this pieces XX%? we and which will question sale you piece? embarked out three move fellas over When on those

next still Now owe is to for million, $X year. think another which with million savings $X we I we'd restructuring, declared what our for

that. at look you So

in points Now you alone, close that the balance XXX at to obviously from are looking and have would come EBIT then product. to of from improvements basis

that the on And can which be these is it's you now I of is the focus I front achieved has business it think part units. And many because would so mix. restructuring, bridge, the really achievable, obviously conceptually, no -- that been tell again, in principal there the because here of it's product program. is more And

business fact, many these even exceeded In has in been units. it of

that are as we of of investments really have side significant that capital to be a types if good years, last achieve made folks the We operations, product and good able These we to Similarly, the to salespeople. it's position SG&A business, technical to to of on investments not have base over the those of so in make and in for have businesses sales execute need been of that. got our profile. a plants basis several type the us

for margin. formula is continue here, manufacturing SG&A still see down. costs as the growth revenue, steady a in where grow think the a we But a and is of bring these the think to businesses case, fairly and I them I EBIT well, steady, So fairly still accelerating formula of hold you you that's what number

Brett Hundley

appreciate color. that I helpful. really That's

back they seen in switch color, actually look globally. to remains Mills, an their that a thinking; food Just event, to synthetic, brands had a know I I of natural? removing it standpoint General serial I'd whole of is, turn guys cash maybe to got from earnings question the conversion revenue you your Colors the to towards get an that. natural. solid But lot Sensient were We for beverage. said where inside is thoughts some just where somewhat recently flow discussion, to somewhat from looking And and between these me back synthetic, from get agnostic do announcement the guys, just start earnings an away and flow switch cash to from standpoint; you one over just synthetic just be curious on

Paul Manning

this. would I Well, say

to me deductively. going answer one. bit little journey, of take on am Brett, this on Let a you a somewhat I this

notion one, to back in from not have of necessarily natural from to number a -- think moving that synthetic seen synthetic, I So thing back is markets. that the or new we

in products. where ban a facto use the even that activity, type de many is there We Europe, in synthetic have on colors of of seen

So terribly to us. new that's not

In fact, of type we the Americas. that have certainly in activity even seen

it I was this to think was profile a from movement is high unique synthetic. natural what back fairly case, about

And will I those so continue. think,

because type of that weren't we we terribly have that, in short, surprised seen So activity. by

about colors; products -- any speak look of the any to or market. Now as not lot customer those and specifically natural going am of other I or brands in a you at evolution the that of

this there of look in about products. There there that, on I a oftentimes Europe. lot food product two talked one before -- views vividness not The type on say a at these to and and which conference is in of have of is colors. calls; view is intensity flavor of same much you natural So as

food European color even the different pretty Very the typically Asia, don't the intense bright are American bright market. in very-very and market of colors Americas You and from normal. as a see use most where

think, the to there that And color model? continue question these colors. synthetic the vivid or continues follow will been model very very answer think it I be, will about -- well match it's I European on going at so, And times, bright, my U.S. to has

the So words, synthetic going other to if the from natural in natural, match convert you are synthetic. must to

-- to are to that, evolve. continues And think going that see so this think I you market I as

of are the blocks. conversions you Some are simple very right seeing building now

as novelty expanding You in really need involve work. going for involve pallet. way of can applications, in the brands But in terms way has It involve doesn't they the core to technology, the much to much each color color. been natural change, does much very of significant these not which more the specialty. applications of technologies our synthetic utilize it in swap It doesn't of of are and much types the

grouping considerable a extensive of of portfolio market focused the forward. market. typically move not and on address we have take technologies. part We color, natural attention a rather block as much building and is extensive But that matching future to can a of always this We very the this color, synthetic going that's

has over last seven to eight degree very years. Something that a working or on been the Sensient great

think are I very we So there. well positioned

about to about you profiles, decisions face about customer Now, and every and the your earnings point natural. commentary. figured it, you'd journey, I To enjoy synthetic is make that. going talking profit And are potentially there but is let's different sorry whether the flow; about cash

interest the are of it's to colors very market, is Sensient and best the think be the I inevitable. aligned in -- with market natural

there think important be to very don't aligned any believe to is that. for turning And I back. so I us it's

I based market So that. even think I it, a the synthetics. broad doesn't just to years, synthetic back guess before the XX don't necessarily because don't see a apply, going just on question my I fixture being to and the to be simply is market conversion is take XX in

to color to pursue to and continue our And it's end, so emphasize opportunities interest that can. many as in to we best natural as

Brett Hundley

journey. the appreciate I

as into should Steve, Just CapEx that updated as or we XXXX Should that management? quick we a more real is read of that the by of of more delay read more a delay? views on change,

Stephen Rolfs

little bit little have of restructuring may be priorities, changed QX, the delay. focus of the there and a put a some It's on QX bit our in in of a both. so even with it Certainly we have could

number are because the and to do I also. fewer think an on and that into of revision so think have maintenance year. so realization the down, our relatively number We I update, come and facilities we a lot the CapEx needs restructuring, a in revised based conservative of bit going little the our is

Paul Manning

X% on this the we long well, a close And Part our of about to year, probably you done few tell of term some I'd you more we is, return I back. would add the being by be more there. about know, end work up as this capital. achieving goals judicious from to years articulated be investments that, make. would XX% Brett; have is we Yeah. about that of for there But invested

me projects, some So don't ROI no of the certain opportunity any company. simply decline yield a this or is for significant that opportunity to ROI saying

as And think calculation part so that's of I this well.

evolved appealing real have things look didn't perhaps as sign. some a As they formally, positive as or changed, think that's had and projects I certain

Brett Hundley

great. That's All for the right. Thanks time guys.

Paul Manning

Okay. Brett. Thanks


the Francesco And comes our next Sidoti. from line of Pellegrino question from

Francesco Pellegrino

Good morning guys.

Stephen Rolfs

morning. Good

Paul Manning

Francesco. Hi

Francesco Pellegrino

you lines, be am not concern, specifically, Fragrances end for like had any to? bit, over attributable reassess given maybe CapEx sure the product here if or the as Just be tempered appealing. projects am year's it's million might if Colors, that causing delay, next -- certain mentioned just in there of wondering, some certain could whether be about I little not the or you sort since will streams maybe Flavors quarter market fourth we $XX or a were to discussing expectations investments just to may -- where left is reduction I revenue between carry and of not

Paul Manning


think fact CapEx, of not you When significant project. a In about it's at if all.

two from First going or anywhere complete year to it. to it's take all, of

So of anticipation in new done everybody is in done wisely It's much start invested sure being the a a to technology CapEx is buying in make we It's anticipation. adopted. in of are there. so done anticipation market, of colors, change going natural like

in So nature. very these are long typically term

not out is upgrade Now planning; parts standard me every the better indication uh-oh, some that I out and goes course, the on you CapEx get we these no, hold got or remains. in to we But got trouble, a think stuff here, year, that of there is CapEx. of of of this kind into lot I I saying, that's -- plan, floors to change but the are

invest if we then to to might find CapEx the up, revenue. opportunities number to we fact, trouble, are you more the thought in more in In need generate see business because I shoot

Francesco Pellegrino

Okay. in fair a forward But be that a is is be that potential the planning needs of guidance end then? market long your slowing again, all indicative -- could term of your in down a change to then nature indicated, it a how any there in you actually CapEx it question had and that thinking reduction

Paul Manning

have would No. changed It's on indicative a I my mind investment. of, anything good be that

Francesco Pellegrino

that had to regards Okay. guidance provided full I that for be given Flavors and the is year in revenue In actually you think to Fragrances, guidance the flat, regards you quarter your right? and fourth Flavors to

Stephen Rolfs

That was QX.

Francesco Pellegrino


Stephen Rolfs

It was QX. applied guidance to revenue flat a

Francesco Pellegrino

Okay, okay, QX.

want. the actually route lot create formulations, problems, said the guys conversion to the there conscious, -- something looking one colors more had is other more is natural wanted company wrong quarter cost a the and at the going I be Paul due the right Then to there approaches? sort approach basically not necessarily wrong just how from companies that's route, about would a bit -- is call, go is two hue that's the had cheaper and product the you approach, and thing getting but like right that end that's little that day, the to Okay. on the on to There and going group approach synthetic was touch of of you second undergoing to was, cheaper

companies decision, at discussed making come the see you I noticed around decisions ultimately going the being the to third made costly for of of am decision were time a that to eventually had these them. right You quarter? been more lot wondering to had have if those that you able the during any And

Paul Manning

many thing do natural I it market, dollars think you then the is well not correctly. The to that, you is, the you to spend Well to customers it this, correctly. are -- can yeah, shared have do conversion to that's do make worst and by color do incremental and the I prospects a that as going if also view there of are hold view the

and your and incremental revenue category have costs, cases, actually the hurting you some you be of now the So may in revenue overall.

the this pipelines And case. are vast offering to that on manage each customers the the would we expectations in of so, world synthetic say topic, of around of majority I the the match

than the use in don't this Now that's when more and a you see a new you go the wide in I of can forward, of comment is you are On converting launches colors you and well, the empirical any store, think from we are scale about diminishment go an is anything, to existing of an necessarily that brand. as can here. a trend right, of there talking as -- markets food plenty

in are run So good, customer said; color have terms into, majority previous is fundamentally, offering. I problem the the that I quite I of match would think market and what of the here the the the agree signs think because base you the does still not with

So and visually, through own the on flavor study, their secondary significantly the generated the and it's is by topic of concepts a primary is color. problem. research But research what our impression we that, found have people's

that converted, researched So if is changed. had not flavor that the convert in actually tastes not of minds about they what something not many and a but differently, now the were flavor red the seen it's more we products consumers, that now have color, as and complaining the Customers, red it lot and did of irony is, the optimally. here have was of and than

the but tells generates product, that a inextricably that product the and of of for is impact the it you, well. is flavor also significant, a only it to experience appeal the that standpoint tied marketing is So what as color and not from

and an I closely. watch So that that's important very think consideration we

Francesco Pellegrino

to was any authorization, repurchase in your during fourth adjusted helpful. of to quarter does regards fourth Okay. item number range; the the guidance share One the range implied EPS repurchases addition housekeeping given quarter? imply That share adjusted guidance the EPS

Stephen Rolfs

really amount. Not basis. share share opportunistic based our repurchase a significant given really. It's on not is No, count our on right an program, and now,

good the and that's at in way in a third quarter, see stock will And opportunity can chose continue to the second reacted to it. the we a go the the from stock. buy as bit we to when You that look results quarter,

as she pick goes, a when But continue will we activity quarter opportunity. also there an dramatic we quarter up So really the anything anyway. have fourth impact will is look to EPS but done that on at steady in the wouldn't fourth

So no, in the that's guidance. not

Francesco Pellegrino

it, not you mentioned for I sure And the fourth rate Okay. implied am tax quarter? the if

Stephen Rolfs

I what last quarter. a of from much Not change said

half of second somewhere year, kind said think the are. that's XX%, and we The I I of between XX% and where still

on basis of So finish within basis I tax an the rate. up probably think points prior we annual will the year's year, XXX

Francesco Pellegrino

perfect. you much. guys Okay, so Thank

Paul Manning

Francesco. Thanks Okay.


our from question Intelligence. Christopher next Perrella And comes Bloomberg from

Christopher Perrella

A question has the that disruption the regards Hi, the in good to morning. first of business half stabilized year? on in customer that Asia; happened

Paul Manning

Well, disruption the nothing has on But obviously, of is for has been that. I changed really rest think, for the customer of a changed up have make to side. lot business, the what they able

and want where certainly nowhere You be, it up, saw that was near where can I be. to the top line it

they compensating done good think So for reasonably that. yeah, have I of job a

made these territories, we a of of which some in We in. seen recently many of some have have good investments lot growth

future the good continues think I very-very be to in Asia. So

Christopher Perrella

flavors you the seen growth in competition increased the or from trying regional business, seen And players smaller has market small companies? in larger slowed at label bids other the companies? and reach the among customers, you among to right. Have private All have activity since increased regional down,

Paul Manning

depends of been mean I small always market. be we has what is, a Well definition a I and competitive it flavors your to what think of basic some here, see is, don't on but

necessarily are so. for have I that not sized move a we that new There company. normally moved are would onslaught be would seeing different that customers needle certainly certain brand for very what an us, needle think, we much and flavor the wouldn't of may folks the for say seen? I bigger

to we where be are So compete try successful. to we going

are but a as I you has target well. But And I is -- been guides market. is think Color I is every no, there, we flavors people of number competitive wouldn't these some that chasing little trends of seismic that competitive, so there bit because tell a as we yeah, the businesses are mean, shift people a market, how competitive are well. one a a that customers of of these

Christopher Perrella

One realized what number? Okay. still question, are housekeeping for Fair XXXX, any your to be savings expectations restructuring enough. that for

Paul Manning

range the $X talking are $X in million to We million. of

Christopher Perrella

very you Thank Okay. much.

Paul Manning

Christopher. Okay. Thank you,


of Capital. line Palisade Garo our from And next Norian question from comes the

Garo Norian

Hey guys.

Paul Manning

Hey Garo.

Garo Norian

maintenance days? things small these few CapEx ballpark your would a What Just here. you

Paul Manning

I -- to am say about $XX would $XX million. I thinking million

Stephen Rolfs

I million. would about $XX

Garo Norian

can of, this color than doing kind you year, little or the things rolled doing Is just on expecting Okay. of on give you for And restructuring you next into kind guess, is is? I that a then sooner incremental that what been you would have haven't things that thought, are just that might you have year, exactly? what that are or

Stephen Rolfs

understand the I On restructuring want make I -- question. which, sure on your to

Garo Norian

reduced, Well considering the of I kind non-GAAP because gap the mean Has versus I guess? the yeah, GAAP incremental the gotten the restructuring, for this restructuring year. is some

Stephen Rolfs


was it. So what

related facility. and the of Indianapolis exit primarily closure to was that the So out

write some the on we had So down assets. fixed

decommissioning as like closed we the other had and that certain some things the assets, was prepared That's And of we or sale. then out, some majority it, of remove areas Some there it. moved for equipment. of to also, it demolition

Garo Norian

it. Got Great.

much. Okay, that's all I need. so Thanks

Paul Manning

Garo. thanks Okay,


[Operator Instructions].

end company session. We reached At the back the company the of question-and-answer our Please questions. I contact closing turn remarks. any time, the for this additional have to conference will with

Stephen Rolfs

Okay, thank morning. you for your this everybody time

call today. Thank As follow-up the and moderator any us by all means, a have that our conclude will you said, for questions call, give you. if can you


that lines. you participation you today's for And thank that does ask your and please conclude your conference. disconnect We