Good morning, everyone and welcome to the Sensient Technologies Corporation 2015 Fourth Quarter and Year End 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.

Good morning. I am 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 2015 fourth quarter and full year financial results. I am joined this morning by Paul Manning, Sensient's President and Chief Executive Officer. Yesterday, we released our 2015 fourth quarter and full year financial results. A copy of the release is now available on our Web site 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 restructuring costs, acquisition related costs, currency movements and other costs as noted in the company's filings. Non-GAAP financial results should not be considered an 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 Web site at www.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 the 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 will hear from Paul Manning.

Thanks Steve. Good morning. Sensient reported adjusted earnings per share of $0.71 in the fourth quarter equal to the EPS reported in the comparable period last year. Foreign currency translation reduced earnings per share by $0.04 in the quarter and in local currency adjusted EPS increased by 6%. And local currency revenue grew 5% and adjusted operating income increased 3%. Most of our businesses performed very well in the fourth quarter, in local currency the flavors and fragrances groups operating income grew 8% and its operating margin improved by 100 basis points. The Asia Pacific Group's operating income was up about 5% of local currency. And within the color group, the food color, cosmetics and pharmaceutical businesses all reported solid profit growth in local currency, but the color group's operating income declined due to the performance of the specialty inks business. For the full year Sensient reported adjusted earnings per share of $3.05 compared to $3.02 in 2014. Foreign currency translation reduced adjusted earnings per share by $0.22 in 2015 and in local currency terms adjusted EPS grew 8% for the year. In local currency, revenue increased by 3%, adjusted operating income was up 2% and the adjusted operating margin was 15.3%. The flavors and fragrances group has strong capabilities in sweet, beverage and savory flavors, natural ingredients and fragrances. We are progressing with our efforts to ship the group's product mix from simple ingredients to more complex flavors, flavor systems and fragrances. We are also making progress with our restructuring program and other efforts to lower costs. The combination of upgrading our product mix and reducing our cost structure has improved the group's margins and will enable us to deliver sustainable profit growth and additional margin improvement. The flavors and fragrances group had a strong fourth quarter with most…

Thank you, Paul. In the fourth quarter Sensient reported revenue of $339.2 million and operating income of $31.6 million, which includes $15.1 million of restructuring and other costs. Excluding these costs, fourth quarter adjusted operating income was $46.7 million. Foreign currency translation reduced revenue by 6% and adjusted operating income by 5% in the quarter. Diluted earnings per share from continuing operations were $0.43, compared to $0.55 in last year's fourth quarter. Restructuring and other costs reduced earnings per share by $0.28 in this year's fourth quarter and $0.16 per share in the capital period last year. Adjusted earnings per share from continuing operations were $0.71 in both this year's and last year's fourth quarter. Foreign currency translation reduced adjusted EPS by 6% or $0.04 per share. In local currency, adjusted earnings per share grew 6%. Sensient's revenue was $1.38 billion in 2015 and $1.45 billion in 2014. Foreign currency translation reduced revenue by 7.4% and in local currency revenue increased by 2.5% for the year. As reported operating income was $166.3 million in 2015 compared to $130.7 million in 2014. Operating income included restructuring and other costs of $43.6 million and $90.6 million in 2015 and 2014 respectively. Adjusted operating income was $210 million in 2015 and $221.2 million in 2014. Foreign currency translation reduced adjusted operating income by 7% and in local currency adjusted operating income grew by 2%. Earnings per share from continuing operations as reported were $2.32 in 2015 and $1.67 in 2014. Restructuring and other costs reduced reported EPS by $0.73 in 2015 and $1.34 in 2014. Adjusted earnings per share were $3.05 this year and $3.02 in 2014. Foreign currency translation reduced adjusted EPS by $0.22 or 7% in 2015. Adjusted earnings per share increased by 8% in local currency. Cash flow from operations…

[Operator Instructions] Your first question comes from the line of Brett Hundley with BB&T.

Hey, good morning, guys. And thanks for taking my question.

Good morning, Brett.

Good morning, Brett.

Steve, just real quick on something you just mentioned, is there a reason in particular that you wouldn't expect 2016 share repurchase to be as robust year-on-year at this point?

I think the only thing I would say is, we will look at it opportunistically. One of the reasons, we've been able to do what we have is because where our leverage ratio was. We are very comfortable with where it is now. But, as to how much share repurchase we do, it's going to depend on one of the attractive acquisition opportunities. So we do want to keep the flexibility to do acquisitions and to some extent share repurchase is going to be the variable that we used to fill-in based on what opportunities we see in acquisitions.

That's helpful. And I don't know, if I'm just doing incorrect math here relative to what you guys provided in your prepared comments and I appreciate the color by the way on the currency aspect of things, I think I under-appreciated some of the other currencies that you had exposure to and the weight against down the wall with your cost savings, those good color on your cost savings expectations. But I'm getting a lot of questions on margins. And I had a couple myself. When I tried to adjust for currency at both of the revenue and earnings line. And I look back at 2015, I mean you guys ended the year with really solid currency neutral sales growth in your two main segments. I just didn't see it translate to profit the way I thought it would. And so I just want to get qualitative, quantitative color for you guys. If I try and adjust for currency, at both the top line and middle of the P&L, I get improvement in your flavors margin for sure, but on the consolidated earnings basis, again, adjusted for currency, I kind of get flattish operating margins year-on-year. And I think most of that is due to the issues in the color segment with specialty inks. I guess, I would have expected better performance in flavors with some of the culling you guys have been doing and some of the cost savings work. So anyway just want to match that up against your expectations and get an answer from you on that?

Yes. Let me address first part of it, Brett. And then I will let Steve reflect on the math behind the revenue and earnings and how that nets out. I think that, yes, as you look at color, the biggest impact on the operating margin there was certainly the inks business. As I reflected on or as I commented in the script, each of the other segment food, pharma, cosmetics, each had very nice revenue growth along with operating profit growth of a typical nature. In other words, the operating profit growth exceeded the revenue growth. It's kind of the leverage that we were able to obtain. Because the inks business was typically -- it runs typical -- a little bit more profitable than the average on a gross margin basis because that was a disproportionate fall out. I think that's why you see the operating margin impact as you did the color group. So the flip side of that is, as we expect and have guided towards significant improvement in that business in 2016, I think you will see the reversal of the operating margin impacted that business had in 2015 much improved in 2016. So certainly that would be our expectation. I think color would be very much back on the track towards where we had been operating in the low 20% category with potentially in a longer term even additional upside on that. As you look at flavors, certainly I wanted -- I want to be at a pace or getting at least a 100 basis point improvement in the operating margin on a quarterly basis. I think we certainly demonstrated that improvement in the second half of the year. Again, to some degree the magnitude and the pacing may very well be related to the culling…

Well, I will add garlic to the list of crops that I watch every year. Two other questions, one can be quick here -- maybe a quick answer from you guys. Your guidance for 2016 disappointed me because I had underestimated the impact from currency. But even x-currency [indiscernible] what I was expecting and Paul, Steve, just a kind of build up from the expectations obviously came from the cost language, the cost restructuring language that you guys gave this morning. I would see about 3% earnings growth alone from cost benefits. I would see about a 2% earnings growth just from lower share count in 2016 versus 2015. And then to the point you just made Paul, on your inks business coming back, I mean I could get up to 3% earnings growth just from inks "normalizing" and getting back to that low 20s margin on color. So I'm at 8% alone just from those three items. And then you have a better mix potentially in flavors, you have the back half of the year maybe even earlier benefiting from conversion in colors. And so, I feel like your guidance is conservative on a currency neutral basis and I just want to see if you guys could address that quickly. And discuss whether it's due to the overall macro environment, currency or if you think I'm just -- if my building blocks are just too high?

Well, I think the quick answer is, we don't want to disappoint. I think the other quick thing is that you mentioned a lot of very positive things that we're expecting in the company not only in flavors but in colors in Asia Pacific. So I think you hit on a lot of those items as well that we believe what we are going to continue to execute on in 2016. So again, my quick answer is, I don't want to disappoint. My more elongated answer would be as you look at the year and as we look as we describe for each of the businesses like a color flavor in Asia Pacific, we have very high expectations for each one of them on operating profit improvement for the year. I quoted high-single digit operating profit growth, my expectation for each of those groups. What offset some of that is that that corporate expense that I noted in the commentary most notably linked to performance based compensation. So I think that's a little bit of an offset to some of that. As you look at the macro economic environment in many of these markets and on many of these product lines, we are certainly seeing movement towards customers delaying launches until the second half of the year. When you take for example natural colors many of the announcements that were made last year were for companies to achieve this natural color milestone by the end of 2016. And so certainly that is playing out a little bit in terms of how I see the year progressing, stated a little bit differently, for us to achieve high single digit operating profit growth that over the year, I don't necessarily see each quarter playing out precisely that way again owing to a…

That's very helpful. I want to just say one more and I promise I will leave the floor. Paul, I just want to congratulate you on the chair announcement. I think it’s a positive change. I can no doubt deserve praise for assembling this company as it is today. But clearly, you are your own person and I think you've your own ideas. And I think wall street has historically wanted more accountability and more drive from this company every time and I think that you have that within your arsenal to deliver, you've affected a number of changes early on in your tenure both as colors manager and CEO. But, can you just talk to the street now about what's important for you to drive going forward. I mean I think your evaluation is really attractive here and so I think there is a little bit of a disconnect still between investors and what you're trying to do as a company. So I just wanted to birch that subject with you and I appreciate you're taking the questions.

Sure. Brett, I think this certainly I'm very grateful for the opportunity to take on that role as well starting in April. But, I think that the company has got a lot of very positive things going for it. Ultimately people will respond to results and they will respond to our ability to execute on the things that we say we are going to do. And I think that we've demonstrated over the last say five or six years as we've been talking about things we are doing in the color group and the things we are doing in the flavors group that we define a strategy. I think we articulate it. But, we would like to discuss this very openly on these calls and certainly in one on ones with our shareholders. So I think that -- to me -- that's a very important part of how we like to manage in the company and we believe very strongly about accountability. We talk about this performance based compensation that we've introduced as a company over the last few years. And I think that -- as much as companies talk about it, I would like to say that we are very cutting edge on that. Less than 10% of companies -- public companies have a policy in which the CEO's pay is 70% to 75% performance based and there is also a retirement requirement. We have both of those things. So I think this is the ultimate pay for performance scenario that I think we could put together as I company. I think that's going to continue to be a fundamental tenant of how we govern and how we manage the company and ultimately how we interact with our shareholders. So I think those were important. I think we're going to continue to emphasize those elements. And we're going to continue to really execute on our strategy in a very open and clear manner with each of our shareholders.

Thanks so much.

[Operator Instructions] I would now turn the conference back over to the company for closing remarks.

Okay. Thank you everyone for your time this morning. I assume there maybe follow-up questions and if that's the case as always please feel free to call the company. But, at this time we'll end the call. Thank you, again.

Thank you for joining us today. This does conclude today's conference call. You may now disconnect.