Ingredion (INGR) 2 May 192019 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Ingredion First Quarter 2019 Earnings Call. At this point, all participant lines are in a listen-only mode. There will be an opportunity for your questions. Instructions will be given at that time.

call recorded. today's reminder, a is being As I'll conference now to Ms. turn the Kos. Heather Please go ahead.

afternoon, and good first morning, and Good good evening, earnings quarter call. welcome XXXX Ingredion's to

CEO; Jim Joining and President Officer. our call on Financial Gray, are me President Executive the Chief and and Vice Jim our Zallie,

hours Our issued on posted presentation this could in be found this for a could were release that ago accompanying results found The on few slides website convenience. were the a and be our morning press website, your ingredion.com. also

As our circumstances them statements. and results statements, predicted reminder, the in and to comments a those may within or forward-looking update Actual contain These various Ingredion future as this is forward-looking could uncertainties. change. subject from the presentation differ under materially statements if no are in to risks obligation

company's cause release concerning discussed those this today's materially information that Additional be and and report factors subsequent can results on found recently morning's to differ Forms or X-K. reports from actual the XX-Q on Form conference most in press filed XX-K call annual during could in

will operations, we to GAAP operating tax presentation also included information income, release measures in and note press effective and to flow financial measures certain call, today's reconciled appendix. including share, adjusted adjusted this During rate cash to non-GAAP adjusted adjusted which non-GAAP are earnings from per refer and U.S. in our

pleased I'm over to to Now, turn the Zallie. Jim call

today. to us everyone welcome Thanks, joining and Heather,

share our a expected by $X.XX and Global to $XXX results. me net two Let impact brief a as impacted earnings share. and of our approximately exchange quarter start with continue sales negatively per million foreign recognize first by recap issues, which our performance year-over-year

co-product face material continues we America values North market as a lap raw year-ago the period. in higher to Second, challenging

production and by mill North other planned in These offset the America fructose and was America, South were to higher total as Canada. lower company our wet foreign in partially syrup factors costs corn by the Stockton In and other we as starch currency of operating XX%. by high response, volumes impacted series continue the effects taking down costs. modest a X% inventory from by extreme in devaluations specialties actions. costs, of and higher corn income net impact net weather closure weaker U.S. regions, and experience and Across income driven of industrial shed pricing growth. the higher from Our our a corn we're combined volumes well Operating

is to accelerating of We to cumulative expected are million run year-end $XXX also rate XXXX exceed Smart savings our our $XX which program, target savings Cost million million. $XX

make our previously business, to sugar Moving which reduction acquired and are on portfolio continue we higher-value future and specialty provides growth. have of starch proteins. investments for announced Furthermore, Polymer excited plant-based Western we to the $XXX million potato to texturizer capacity our strengthens growth expanded our strategic platforms, progress in

a Mexico. We Juan low-calorie year early sales XXXX. state-of-the-art We are this produce of San by anticipate starting end the schedule in facility to on our del sugar Allulose, at in Rio, rare

recent added great FDA's sweeteners. labeling approved specialty follows will to Mexico. as not the existing declared be that will sugar in initial the excited We Allulose now its an of to U.S. guidance of about are be which products, label a portfolio our Allulose food on need complement

City, expect on year. be to to of South protein at plant the end to produce pea-protein plant-based Moving we Nebraska isolates Sioux operational our our this by growth platform,

progressing venture as with pulse-based of planned. flours joint is Verdient range for Our a

of during year. the products second the Verdient food commercialize applications food to and term near in expect into in other consumer pet the to sales half We expand products

in produce in our Foods, startup a eggs. traditionally breakthrough Clara San Francisco-based technology by excited are to found We announced with distribution biotech animal-free with also and investment recently agreement proteins high-value,

moving North Now America. to

being indicated in half with we of versus fourth contributing call, our second the the factor costs. in be layout half we a first North America to As the expected lower corn quarter

sweetener We also and experienced extreme weather, our across and both move network. starch our impacted which make costs

we our starch optimize starch Specialty America corn down Stockton in sales and carried related ongoing higher inventory Mexico fructose our North to given costs efforts from shed. $XXX in last our Additionally, XX% income and down due In network. pricing period, partially were to improvements. year. income high was Operating devaluations syrup driven Net foreign was cost lower million, industrial currency America, were down from by increases volumes. the partially net U.S. ForEx impacts, million, lower quarter year-ago by down for $XX and offset and South volumes. offset sales to Operating volume the significant XX% planned

along are experiencing given Argentina, with We impacts peso. negative devaluation of related in the recession the foreign exchange to continued economic lower the volumes

the near-term situation, exploring economic co-product experienced also weaker of In recovery. a prospects we Given severity we measure business every improve cautious remain Argentina's are the about the we Brazil, for to performance. And returns.

growth, to volume by In region Asia-Pacific, sales flat. sales led growth. continues Andean specialty net Our net demonstrate were strong

Foreign regional currency region. mix and across higher devaluations the increases costs price were by offset corn

higher primarily Pakistan experienced net which in due in pass-through pricing in Europe offsetting costs. X% a year, has region specialty impacted in The As the growth shortfall volumes pricing took, of operating corn along we The through reduction this product EMEA nicely to expected, have in Europe tapioca actions a costs, core a $XX in and with franchise prior managing of us region, recover XX% delivered the partially XXXX. down tapioca sales, lag rebounded after ingredients in decline devaluations family. in Pakistan. in million Currency the our specialty strategically helped recent with margin the both income, and versus crop a important challenging

costs. foreign through impact corn higher income exchange XX%, by the of foreign price and mix. partially driven Our Pakistan Operating to $XX costs, team down corn exchange was higher million, and continues pass impacts favorable offset by

to me let performance off detail. will Jim Gray, our Now financial it hand who more in discuss

operating the FX and driven raw higher for were quarter. production $X.X and the and adjusted down material billion Reported were $XXX regions. Gross $XXX million margin costs incomes XXX points, by and Thanks, lower Jim. profit devaluations Net by across operating million operating lower was was sales basis Smart associated and of income $X restructuring than was $X the acquisition adjusted The difference income Reported to initiatives with million. Cost the of our respectively. of and integration million, with Western charges million $X associated due business. by Polymer

increase. QX net beverage our for volume foreign driver Our and driven at was a higher of Price was of primarily Unfavorable year-over-year earnings devaluation of million sales $X.XX mix in million accounted down the million ceased Argentina, attributable wet year. per increases Brazil. the volume adjusted same our by foreign was recapture mix XX% weaker and in in raw $XX to reported devaluation costs due were on Brazil, pass shed Europe. down Stockton decline. North in exchange Brazil. $XX of down for South of last sales America, as the recession milling North currency the up some share impacts as price Price $XX while respectively. X% decrease In Argentina exchange to and $X.XX, planned and was impact through material add-backs were teams largest and facility. Volume was Pakistan, $X.X dextrose Argentina took price America, $XX year-over-year million was sales America up. Asia-Pacific quarter sales In billion volumes favorable to of the the Lower sales in mix and we was net

net due partially offset pass-throughs. flat were sales foreign volume net lower had only EMEA were and devaluations to price lower and impacts sales by as volume core mix. offset to growth the due exchange mix had and price FX that Asia-Pacific higher growth pricing by exchange across foreign corn region

and For due America to costs, income $XX and $XX higher higher the $XX corn and Canada. extreme in million weather modest adjusted income operating quarter, million impact inventory and and reported respectively. decreased net costs, million, North from a operating decreased production U.S.

million, America period. of driven operating down $X and Brazil in the volumes income impacts the Argentina South versus Brazil in Argentina year-ago by and devaluation and lower currency was

the foreign exchange by costs across discussion wrap impacts $X quarter. driven lower share. down favorable region, was with per down regional earnings higher by $X were $X million, Corporate foreign the to by costs the quarter unfavorable of for We'll impacts. growth. higher partially EMEA the the and specialty costs corn Asia-Pacific million offset was primarily corn and due of up volume exchange million

from On adjusted. the reconciliation left the page, reported side can you to see of the

lower On the share security $X.XX of was right saw side, our operating a due for share minus per a to true-up $X.XX Mexico in decline decrease a we was foreign Unfavorable per operationally, $X.XX across regions. contributions. income was income attributable per share exchange social margin of one-time to $X.XX while Other share.

to interest benefits costs, financing share-based of per compared for share a $X.XX driven a Moving contributed to contributed and of lapping largely driven outstanding. driven period. share to rates a a higher by decrease, saw tax by payment average per $X.XX costs tax Higher primarily share balance in Shares offset as outstanding benefit the items. our Financing decrease awards adjusted shares by prior non-operational decrease We and from higher year-ago year. the quarter, by $X.XX lower unfavorable per the $X.XX partially share. taxes higher debt were

was and cash income. First as $XX of in capital than timing a by last result XXXX operations million, net provided quarter lower lower year working

balances access lending fund the rates programs. supplier it than prior in was year, cost financing to versus effective short-term Given the increase receivable more accounts rather

corn of in Pakistan of million Additionally, Mexico. prior-year's lower inventories by were investments the higher higher specialties timing expenditures lapping and $XX purchases million of driven year-over-year growth are platforms. given Capital $XX our

mentioned of Polymer million. acquisition investment Jim earlier, for as $XX the we Western of the quarter Finally, an completed in

outlook, $X.XX our per we earnings to to in anticipate range Turning $X.XX. the adjusted XXXX of share

more top impacts Argentina, than incremental lowering America to EPS EMEA deeper starch our production Asia-Pac. higher as recession we continue our range are anticipated and network, in anticipated and an guidance FX an costs to the prolonged adjusted and We North optimize end historical reflect continued in of

costs excludes acquisition-related integration potential guidance well costs. restructuring and impairment any as as Our

to impact to negative $XX to negative foreign income million during half are for XXXX year. and prior million year. adjusted relative We year flat operating of for the exchange currency expect of be impact first will We the the $XX significant the that to slightly be anticipate we expecting of down

to a EPS of For $X.XX. the full currency year, impact we expect negative $X.XX to

cost expenses, to and experience. including improved year-over-year expect we up both expenses, savings optimization, digital an to process customer and innovation business investments drive in be We global operating as corporate invest

expect in to million costs We rate floating higher on year to million for higher a rates and the our financing debt interest be $XX range balance. to of debt $XX due the

mix anticipate annual we consideration expected effective our have America into We slightly to tax a taken South adjusted XX.X% between expected Our higher XX.X%. and tax operating be rate of rate is as income.

accelerated share XX to weighted outstanding in for impact range expect the million agreement. shares the be the repurchase We the XX diluted average considering total to of of year million

Cost people Lastly, we of to and our to rate additional exceeding savings our volume net drive down. processes Cost run $XX end XXXX, anticipated structural by organize we ways to be to have sales an anticipate expect accelerated X%. identify Smart million America, of $XX the North inflation Smart million cumulative to In We program to X.X% of and against savings.

For expect flat to income the down. operating year, be slightly full we to

We one-time half expect first the lapping and manufacturing due down as XXXX. the network impacts up than starch higher half to significantly be expected from we first of second to efforts. lap half continue of And the is the XXXX cost optimization co-product values

to America expected modestly up prior South are are net year. flat to Volumes expected versus to the up be be modestly. sales

election of devaluation FX and the expect year. the quarter, range economic reforms, effects inflation as to magnitude a of the watchful Given Argentine impact be similar of in recession in income first of we We during well prior to remain the operating Argentina. upcoming the the as

on focus cost to performance discipline business improvement. continue We and and

expected net expected and up operating modestly. to sales to Asia-Pacific be are be is income up flat to

second We the core Europe expect to in half. anticipate and up. income and be in We half EMEA, we expect strong first specialties net Pakistan. sales growth stronger weaker a in operating performance In

Pakistan and from to Although we to region, half throughout cash cost expect operations currency flat In material due anticipate the million the be to of million. modest versus $XXX in a first impacts expect we to overlaps prolonged second range we XXXX, Brexit. $XXX half a raw weaker operating income the in growth,

million $XXX support expect around and and improvements. world the cost as as process capital well to We to $XXX expenditures invest between million growth in

to investing to opportunities to provide to accelerate brings That growth comments which close. attractive returns we remain a shareholders. committed my our platforms, our Importantly, in

Now, back Jim to Zallie.

of outlines milestones, we particularly few a highlight XXXX to released Day, want I Jim. eighth goals. are Thanks, proud. Earth have we the Sustainability we made our annual Update which progress our toward On that

I roadmap we were a were Ethical closing, year. we sixth the Gender-Equality direction consecutive and anchored opportunities once Index the CAGNY, to highlight we to shareholders. defines purpose proposition Ethisphere's offer which is this performance-driven take as recognized we year, moment and driving for customers and roadmap at Most the to strategic growth our of introduced The also and In again World's by earlier Bloomberg's addition, In creation want our named value Companies the one for value culture.

sustainable supported chain operational growth Our ambition and supply and food industrial and core by and sourcing excellence. ingredients in is trusted

open and Our shareholder and that people, call specialties value technology five make together living better. aligned potential our growth We nature And industry. and the with lastly, on ingredient now are capabilities. the go-to-market committed our solutions delivering through strategy let's is focused strategy the changes And life bringing are of questions. remain differentiated purpose create platforms of shaping across We food and customer value. for consumer to executing that growth co-creation trends deliver we the to

line And with Research. first, Driscoll ahead. Citi the David go of Please

Cornell lot. Good in David This morning, a Thanks everyone. is for calling Burnette Driscoll.

Cornell. morning, Good

Hey, Cornell.

Hi. kind I guidance, of just dig the half. wanted America little a in back to bit the especially and on in North

you're say kind hit of and be profits the transitional of one-time a that up So items that back to expecting number don't when half in probably there's year. this you

way Just can last from transitory the of occur wondering to your the expect And number excluding are a around year? way, be corn year? of then laid kind some out put of issues, net given to going the have this secondly, of if would half be items year just back don't dollar costs kind perhaps those you that half across the any to expected the you up you back

Let that. me ask Jim Gray take to

Yeah.

we $XX year, expect million. in we $XX about as be that kind lapping last then from also of approximately into around that That those other was in QX. efficiencies carried the some QX, We we spoke had difficulties And would Cornell, also another think, then more the million. I operational had was which Argo about one-timers. to

oil half of I – regard and the difficulty second of corn XXXX. that value is is first in think meal of majority the the XXXX, of the of out, in higher. the really With how the the occurred lays value corn was to half

we so see And don't half. lapping we're that in the just – first

we values kind right expectations is kind are co-products now you when and of of forward half at current to the think the I way look that for what look the take second our our relative XXXX, our really gross of really corn. we to cost of

don't going market half. market some U.S. trade of more to you corn that's see resolution, the that China anticipation going we really soy clear may the come some think the the us that see and up of improving. it tighten worse signal So half the no either. see second is that's getting that don't We we that really necessarily in some start to to There some to XXXX. says time. and for to There's second take if But

rates of year kind how a then, with you the of of back co-products kind it of those more kind comparing in half the to it last Is year, And of spot is get kind Or of of use XXXX? compare kind in comparison? half of when headwind? the flattish still co-products a where just were Okay. back would

I weakness, flattish a think of comparison, It's is comparison. more it's there generally recent say slight although but I'd flattish a

like something know got I margins relatively a exposure deal, then And like even quarter the through for called the think I them year. of Okay. that you kind I is in the terms Penford perhaps as profitability. of than question it's last out bit year ethanol saw last it ethanol me. first what weak the to your but in we the markets last hindrance to being ethanol American weaker felt seemed North And a small

take your something So for North what's well? business kind just incremental as this wondering And that of pressures that's year that? is the on American creating

that? to take want Jim, do you

say just would in modest a ethanol, very improvement in Yeah. we low that level. Sure. QX, margin Cornell, very, at for I albeit us a saw

for And that's we're now, year. anticipating so not better we – materially the something that's right

lot. it a pass Thanks I'll along. Okay.

Okay.

of color to guess plant-based, Suisse a Thank you making to Moskow about and go to LLC So we'll it's we are part this more what margin Suisse. commodity, return that investment go it mix little that the right like you're is of maybe the Is Securities in of CAGNY the the in little can more big just just (USA) there And rest you. that as market your to us plan the kind areas this going ahead. Jim for and value-add? – you're Robert now investment Zallie, in going kind appreciate. give forward, shifting Credit twice $XXX to? can portfolio? a like specialty little I'm but million Hi. you of for said – expect of of Moskow seeing talked about the products Next, Credit from overall Rob those should confused bit a you've your I - just your that I'd clarity what with margin Hey, you've presentations, Please that just get a

Thank you, Rob. Yeah.

growth and million isolates figure first pulse-based Verdient well made the to the and out pea-protein investments $XXX reduction investments, platforms as have which as the clarify making growth would concentrate. well million was relate are a as Allulose for just that the flours $XXX specifically we So called specialties total on figure and sugar across to as figure, I the the

So, it's across platforms. growth those

to it's $XXX million. a about relates plant-based it proteins, As specifically

years over see that the trend. relates to space, at out that growth million related of next the of called four CAGNY had we $XXX about revenue it that as something five we extremely on to So of is incremental opportunity attractiveness a to

growth compounded last plant-based, is of that. non-soy of years, behind three annual rate up the there's in the a lot XX%. And based consumption drivers Just

of coming strong now, we demand So a from sources certainly deficit products, and still see these good non-Chinese right supply pricing.

So we that guess and the as be lot of pulse a very that good sourcing as the we're on a and facility isolates isolates. based and are belt a relative of The pea-protein the for on was retrofitting and have the business is small think protein produce rates we'll market we soy growth the a the tight producing that based suppliers to market pulse-based I going to is margin structure to are as from the supplier accelerated And obviously the will well trend. a that and pulse-based offers opportunity isolates or grow. state-of-the-art domestic also at growth number remain how those concentrates facility for pea-protein that flours much to on continuing position where

you So your think answer the to getting you'll question. want need markets commodity to just back guess what's algorithm, to the that's timing? and something then, tougher, I seem Suisse an - so easier. Robert because a these from to not just return get you And LLC Moskow – you realize (USA) basically to your quickly Credit do how Securities be I

see we period. four of all capacity investments five-year that ramp-up these think I in to to contributing, a starting over a contribute

that's both strong for in growth sector. change labeling with to especially the here the United of So related plant-based protein again States, drivers growth, now Allulose having and the impending the

believe and three, Jim? the a to clip. So investments, in and be But pretty ramping it's five. from you're those the probably to we we're return in capital on growth and up fast years at of a XXXX, going XXXX going four, the looking standpoint see in

period. we capacity, the exact selling us and the – past, customers, as our And ramp-up assets allowing protein, their as customers teams work really from the usually their and strongly recipes. the are the that are concentrate past, in really about we to understanding a the isolate to the that's of to innovation, commit we light understanding to five-year to or Yeah. customers And as expanded mandate go over proteins into think the understand forward an four our seeking online have sales the in Rob, then plant-based really to come it's have pulse-based fill quality into we've green level or pipeline flour work so their today mentioned whether mentioned needs, we

and the I the customer something we're growth will we previously that the very to platforms growth that in help heard all proteins in is me just other and simple the clean for actually starch-based that believe five company thing reduction and to across to portfolios want capabilities you've sugar is co-create around lend the those call growth plant-based The the emphasis and committed a customers to out solutions platforms, boost mention themselves product relationship systems Rob as bringing that the it co-creation and customers and would specifically texturizers, ingredients, all five. we're to the

portfolio on something investment with So right for as in simple customers at reduction, that think proteins going we trend so the where our and is well. look is that driving we and innovation, working plant-based is the extremely now to return it's that clean much and on sugar portfolio having enhance starch-based as texturizers we're and

So which that regards as with overall specialties at to investment, customers, of return hindsight from lifted intent have to it's in what years now that's working in in supply medium-size Securities customers I going customers that the chain. portfolio (USA) three we're receptive the on entrepreneurial Suisse think and small and Great. are - efficiencies because Credit Robert our as are now to systems, solutions are look looking the LLC to well Moskow receptive for right both larger very as to their

Okay. Thank you.

Thanks, Rob.

to go ahead. Sachs. Samuelson Please we'll Next, Goldman with Adam go

everyone. thanks. Good Yes, morning,

Good morning, Adam.

high of taking comments first, specific that hoping, that you're a color little margin that the felt Argentina felt more you more specifically of cautious seemed South a about on make the to you bigger it was and and America, quarter? of volume in driver like was I the provide that the some outlook pressures could pressure kind in region if specifically, bit but down margin range have you you for the the of end around

Yeah.

can the first Jim outlook. in a first and significant some comments. ForEx consumer really on and harsh the the then had Brazil. unfavorable and harsher and attributable were recession proven spending net had America, We South really to a Let The which be effect Argentina add to impacts our higher South quarter in costs moderate volumes. And slow has recession American corn and caused me to dampening has take in us it additional

So in do comments? country, experiencing. some that additional that's we're want what you Jim, to make

Yeah. look – And, obviously to at cost as and well at Adam, can of how don't look corn pricing. we I we as the corn

I trying the team price And so corn. to think does a to manage cost of really the nice relative of the job mix

So What ability Brazil, for manage is in in volume with Argentina our I confident us feel think a that takeaway, but for the to I South bit more some volume in also America guidance our margin. more for indicator, us really the the reduce is soft really little full to of operating factor contributing was income. what of to year that's regard new

decrement the the Okay. And we really clarify Or last is just sure – is the think in make that? that to more is Pakistan? relative Europe several that in you're you seeing, just some margins, EMEA, And year-on-year? purely there then years, competition

bit ForEx Pakistan mainly it's Yeah, a and little of...

Euro.

bit ForEx well. a little Yeah, as euro of

up the Euro of catch bit So Pakistan in it's related it Pakistan ForEx. to as run corn takes the well. through to time pass And then as price the ForEx little increases mainly up and

a Europe's market Yeah. we're I would I would buying not characterize all. say, modestly competitive and that at competitive changed But intensity there. not the has

to very and good EMEA business the relates perform specialty. feel It it a specialties very, it is about it business as our and We Right. continues well. to mainly very very,

more you for grade starches. of they're if And the you intensity? industrial both HFCS-XX some capacity kind And me starch do be doesn't they're time? declines continue XX it the switching And to America, the competitive very versus and over And how of like about and make in to in others North that that look just you your worried cost Okay. mills I'm or U.S. – seem going the are shift. your to think to actually corn the business see then just Where shutting might landscape going wondering just get announced in HFCS their that finally that and much accelerate, to evolving of – over one competitive that it's food XX just as base competitors entirely?

I Yeah. mean specific policy on Reminder, that announcement early corn make we took you industrial syrup to it's comment high Stockton capacity referenced, is too doing. our what the And not news with competitors really really to closure. any really starch – and are regarding out it's fructose assessments. capacity our

reaction evaluate going to in I'm dynamics assessments in forward. And was in market's the continue the we that see what happening that So sure market. to any really supply-demand to early to going make too regard. But it's

I'll I appreciate it on. All right. pass the color.

Thanks, Adam.

Hundley go then with Please And Seaport ahead. Brett to we'll Global. go

Hey. Good morning, guys. It's good to talk to you again.

Brett. morning, Good

Brett. Hey,

I differently. actually wanted to stay on that same bit topic a little and ask the question

has with changes week whether And Allulose. some States. to channel or the from guidance could mentioned on the that same last here FDA the this about the question you finishing So make draft My to lead do repurposing. competitor Ingredion from not in guys news

in talk that now. process any maybe You American can could on any adding whether you to guys are formally Mexico a displace of about facilities? production meaningful U.S.? not in amount this your at or through Allulose desires capabilities product follow the right of of But in further the core And

on especially Allulose we're from offers, labels. draft labeled obviously in what with very and added mean being nutrition FDA for exclude sugars Allulose which again this the I guidance, would excited total potential now about issued Yeah.

sugar, with well. it's very as as feel we solutions itself where in the added Mexico, be States. well reduction now as sugar for lends in already that demand strong the So to Also a approved, United not

very think do XXXX. about we And strong customer starting enthused in to that. early very we're So we're going have receptivity,

space. So looking this forward, partner in a for XX got with been the technology And continue sugars how great years. to market develops. Matsutani They've in rare we've we'll researching great evaluate

sugar we'll So, platform continue is it. growth for of we'll this as a have at evaluate to intent part look it, And reduction. our central our grow be to to

wins strategic customer plans with part one time, think going at and our get forward then great evaluate I of be will a the under partner. our XXXX, we and it certainly So step investment to belt we'll in want a

in at minus, that. a North I question the reasoning. follow-through there stack volumes on because I And in look it, then at was business a two-year QX or drop-off North go there about years. plus And Okay. admittedly of it And volume I your to the from looked guys over Stockton of how Stockton, in QX look and at was on inside volume point. offset Stockton last But in loss your a I if X.X% went for numbers know volumes talking a basis. do your and back at you two-year Thanks had and that two call declines you're were X.X% and then, if was from curious parts change as about have business just America, from back higher any I'm performance year, QX little America. confused talking closing I'm and other for the transcript

or be closed understand don't that and the just would for a a some. I'm sequential volume why misunderstanding. change presumably understand little Stockton bit with falloff reason QX, I'm better QX maybe So I in to during trying

just to comment for going thing mention from I'm then Jim and just perspective. clarification his Yeah. one sake

And closure, Just December say or then, in holidays. officially could in the to closed the month. closure that. was take like I you closed I think the mid-November record Stockton correct you relationship account in It something to kind November, of into Stockton the guess officially

it quarter the quarter full of four. for wasn't So really,

back are do all comment certainly just Jim, shed? want because of of it we the to on you course on majority, So of the attributing not the volume

saw I we Brett, and really start And of as QX, customers the mid midway mean shed of serving some West Coast, for about through probably that purposely purposely out were retaining we us on with to the hit thought or Stockton brake really to the Yeah. after. we kind a from other went much there. We as okay been very get as sourcing servicing via Cedar other Rapids locations used in plants and we've station customers Midwest what

was in some of maybe trend, weaker that you was look things of sweetener beverages. two-year a did kind to kind think there [HFCS-XX] mostly that volume, into overall I if attributable call one out of we generally HF-XX XXXX at the

a as as step-down So a have time from for for kind seen XXXX and XXXX you HF? we'll that wondering forward XXXX we more out different to run played might go then know little of you I'm gain more data, rate just you if see that and

real move mean into that makes to like mean I I summer? as sense. summer here Okay. feel the last we you quickly, compared is falling do incrementally off HF

staying I – at... it's it's No, think declining

rate. long-term More at a historical

Right.

Yes, yes.

Okay.

realize as well recovery moderate Thailand just a view in some when just out through it Korea, there, Korean the me corn could of corn side get see structurally one of bit you helpful. can reboot on because your changes come us I That's in mix in margin nice to to little can I as the from be you I'll costs would that I hear get some you is from of ability get some there? your an your little tough, hit. made profile then, corn a but us Okay. in one quick didn't a to Korean a be think of think give costs you've So more here expecting really that bit on corn on have are corn of there and And or moderate I costs would just is better, getting outside do this for when margin big update that Asia?

QX continuation It's QX last from year. of and really a

countries I to corn think Asia-Pac second we half. QX, into we'll as other So start in net as well get once see much Korea through costs the better our

Thanks, Jim. Okay.

bet, You Brett.

And company closing queue, back any turn with for in the no comments. it I'll further questions to

Okay. Well, we so much. near and us joining to look the you in Thank future. for today, wanted you seeing to forward thank I everybody just

conference does your gentlemen, for you Ladies that Thank for today. your participation. conclude and

You may now disconnect.