Hello, Welcome to The American Vanguard Business Update Conference Call and Webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Chairman and CEO, Eric Wintemute. Please go ahead, sir. Thank you, Kevin. Good morning, everyone, and thank you for joining this call. Let me start by putting a point on what we had outlined in the press release that we issued on Friday. We expect our full year 2022 financial performance will exceed that of 2021 in all material respects. Furthermore, we expect to achieve significant growth and profitability in 2023 over 2022, and we will be giving you specific performance targets for the 2023 year in about six weeks on our March earnings call. In the fourth quarter, we were forced to delay roughly $15 million of high-margin sales due to a supply chain disruption. Now that we have fixed the supply disruption, we expect to largely recoup the sales that we lost in Q4 such that they will shift forward and benefit 2023 performance. With a strong balance sheet and favorable market conditions, we believe we are poised to enjoy strong growth in all metrics for this coming year. I'll show you here the safe harbor. Okay. On slide three, the global supply chain has been in an unsettled state for the past three years due to the pandemic and shifting buying practices. At one time or another, we have witnessed shortages in containers, ships, warehouses, and trucks used to transport many goods across multiple sectors. Within our industry, these factors have interrupted production of raw materials and intermediates, particularly those sourced in Asia. In spite of these conditions, our supply chain team had succeeded in sourcing virtually all raws, intermediates, and packaging without interruption over the past three years of the pandemic. I am proud of the work that we have done as this has required near constant attention and pre-planning. In the fall of 2022, our domestic supplier of a key intermediate that is used to produce AZTEC, our leading corn soil insecticide, was unable to start production due to capacity constraints. This persisted for several months. Accordingly, we positioned one of our China-based suppliers to commence production of that input. Synthesizing this intermediate involves a very complex multi-step process. While technically capable of filling our requirements, the Chinese supplier was caught in continual lockdowns from China's Zero-COVID policy which, once lifted, resulted in nearly everyone in the facility contracting COVID. This culminated with a mandatory closure of the entire industrial park during the new year. With the return of its full workforce, our Chinese supplier has resumed manufacturing the key intermediate. Also, our domestic supplier is back online. Further, we have started synthesis of AZTEC at our own facility in Alabama. As we continue to receive this key intermediate, we will be producing AZTEC over the next 75 days or so. In short, we have repaired the supply chain and are looking forward to returning to business as usual. In parallel, let me focus on how we are managing this disruption with our customers. We are a leading manufacturer of corn soil insecticides. As you can see on slide four, the many brands that we market in the U.S. and abroad. As it became clear that our inventory of AZTEC was going to be impacted by supply disruption, we began working with our customers to meet the grower needs through increased supply of these other CSIs, especially Counter, Force, and SmartChoice. While unable to make up for the sales of AZTEC that we anticipated in Q4, consolidated net sales for the period were equal to those of Q4 2021. We have now orders in hand at AZTEC in the amount that is 3- 4x higher than what we typically have during the first quarter. Subject to achieving full production, we expect the net sales and gross profits that we anticipated from AZTEC in Q4 to shift forward into Q's one and two of 2023 as we supply growers in time for the upcoming planting season. Before looking forward, let's take a quick step back to recap last year. As per our press release, we have revised our 2022 performance targets on slide five. The overarching point here is that despite the temporary unavailability of our leading high-margin corn soil insecticide during the fourth period, we generated sound financial results on a full year basis. Bear in mind that the figures I'm about to discuss are based upon preliminary unaudited financial data. Going from top of the P&L to the bottom, our revenue is forecast to grow at about 10%, which is within our targeted range. Similarly, gross profit margin at 40% and OpEx as a percent of sales at 33% are also in range. Interest expense will be about 5% above the target for 2021, which given all of the rate hikes that occurred over the course of this last year, is excellent. The debt to EBITDA target is within range and well below our 2.5x max rate. Net income is not yet known as it will depend upon tax and final accounting. Our adjusted EBITDA at 15%-18% growth rate will fall below the range previously given. Please be mindful that we're reporting on 2022 estimates versus our own targets. When we look at how 2022 stacks up against 2021, we expect that our financial performance will exceed the prior year in all material respects. Before turning to the 2023 outlook, let me note that over the past several quarters we have placed an emphasis on maintaining a strong balance sheet. As you can see on slide six, we ended 2022 with cash available in the amount of $198 million. Our debt net of cash was $31 million as compared to $36 million at the end of 2021. Our net average, which is debt net of cash divided by EBITDA, was 0.42. In other words, we started the year virtually debt-free with ample cash and cash equivalents to meet working capital needs while funding R&D, further commercializing technologies like SIMPAS and Ultimus, and completing accretive acquisitions. We achieved this very low debt position after having spent $34 million on repurchasing of 1,668,892 of our shares through two share repurchase programs. A $20 million accelerated share repurchase, which we have completed, and a $20 million 10b5-1 plan, which still has $6 million of capital available for future purchases. We increased our cash dividend to shareholders by 25%, thereby returning a portion of our profits to our shareholders. There are two key takeaways on this slide 7 that I wanna emphasize. First, our Q4 miss was due to a supply chain issue that is now resolved. This effect should boost our corn soil insecticide sales in the first half of 2023. As mentioned, our current AZTEC orders are 3- 4x higher than they would be normally at this time of year. Second, we expect to achieve significant growth in revenue and earnings in 2023. Finally, we are well positioned to address the market and expand our business. As you'll note in slide eight, the outlook for 2023 presents ideal conditions for the company's strong financial performance. As mentioned, we anticipate higher sales of our corn soil insecticides during the first half. Second, we expect to benefit from lower cost of goods and an improved supply chain for raws and intermediates. This should enable us to build inventory to meet demand. Third, freight costs, which peaked in 2022, have settled down and are returning to more reasonable levels. Fourth, the level of AMVAC products in the distribution channel is comparatively low. In addition, our new formulations, expanded portfolio of green product solutions, and improved market access, for example, into Australia and Brazil, should enable us to participate more fully in a strong global ag economy. In summary, we expect to achieve significant growth and profitability in 2023. We'll be giving you more specific performance targets in our March earnings call. Finally, thank you for your continued support of American Vanguard. With that, I will ask our operator to poll for any questions you may have. Kevin? Thank you, sir. This help will be conducting a question and answer session. If you'd like to be placed into question queue, please press star one at this time. If you'd like to remove your question from the queue, please press star two. If you're on speaker equipment, it may be necessary to take yourself off mute or pick up your handset before pressing star one. One moment please while we poll for questions. Our first question today is coming from Gerry Sweeney from Roth Capital. Your line is now live. Good morning, Eric, Bob. Thanks for taking my call this morning. Yeah. Hi, Gerry. Um- for getting on. Just a couple questions. It sounded like the shortfall is on the AZTEC product is gonna push in. It's gonna entirely. I'm not sure if that's your words, but those are my words. It's gonna push into the first half of 2023. I'm also just curious if there's any impact on margin on that business just because you had to find alternatives or pay up for pricing or anything like that, or is this just. we should just look at it as a push into the first half of 2023 and similarly. Yeah. Yes. As far as increased costs, and the only increased costs we have are air freighting this. We're gonna be air freighting all of the material that's being made in China. The material, obviously domestic is, it's up in Wisconsin, so that won't be air freighted. We'll have some additional costs, but it'll be relatively immaterial in the overall margin. Got it. You did touch upon this, I think, in your, in your comments, but it sounds maybe just a little bit more commentary on supply chain overall. It feels like things are loosening up across the board. I know you've been fighting a lot of headwinds on that side, and you've done pretty well. You can't always bat a thousand. You know, is it a fair assumption to say things are loosening up across the board? Any commentary on maybe tightness in any markets or inputs for 2023? Well, you know, one of the key areas since we do a lot of phosphate business is the phosphorus supply chain was really, really bad in 2021. Not only increases, but, you know, Kazakhstan shut down. China was not supplying P4 anymore. A number of our phosphorus suppliers had filed force or claimed force majeure. Yes, that's probably for us specifically, that was maybe our biggest challenge, which phosphorus has come back down. Everybody's back online. Availability of our raws is much easier than what we had dealt with last year. We're seeing again with, you know, some raws having a strong tie, like to methanol, those prices were high. Again, those are coming back down as well. Natural gas is coming back down. Overall, yeah, we're going into this year, we're feeling a lot more comfortable with our raw material chain. That brings me to my last question. Looking at slide eight, raw material pricing down, low inventory in the channel, transportation costs coming down, all big tailwinds. Obviously, you also had the AZTEC pushing into this year, which will be a benefit, but, you know, sort of on time. Any, any headwinds? I mean, in spite of the AZTEC miss, you're sort of painting a pretty good picture for 23, even though you haven't put official guidance out there. I'm just curious if anything that concerns you for 23. Yeah, right now, I think things... I mean, there's always the possibility of having, you know, shortages of different pieces. You know, With our SIMPAS equipment, you know, we're installing equipment now. You know, we're getting things built. You know, different parts are... You know, when you have something that has a lot of different components, there's always concern that you don't get everything on time. Overall, yeah, optimism looks fine. I mean, obviously there are factors that could happen, such as, you know, escalations of conflicts, that would be, you know, out of our control. I mean, the farm economy is really strong. There's the food banks are low. You know, the reserves are not there. You know, in talking with experts in the field, they think that this should continue into 2026. I'm not identifying anything right now that is of major concern. Got it. We're looking out for some good tailwinds for 23. I appreciate that. That's it for me. Okay. Thanks, Gerry. Thank you. Next question today is coming from Chris Kapsch from Loop Capital Markets. Your line is now live. Good morning. Just to follow up on that last question, headwinds, tailwinds. Given that, you know, raw material costs are easing, supply chain generally, notwithstanding this AZTEC issue, easing lower transportation. Just curious, how ag chem pricing from your vantage is holding up, juxtaposed against kind of, you know, what could be viewed as lower cost environment? I mean, I think the biggest shift is fertilizer. That took the biggest increase, as availability is coming. I think that, you know, prices are coming down there. We're seeing some downward pricing on some of the commodities such as glyphosate, glufosinate, you know, some of the more generic insecticides, fungicides. With regard to our products, we're not seeing a position where we're gonna need to readjust our pricing downward. I think that's right now, in most of our products, certainly we're in a better position, because we're kind of the only supplier of that particular chemistry. Some of our distribution business, let's say in Central America, you know, and maybe in Australia, there may be pressure on some of the products that they sell that are commodity. Again, we're seeing lower costs coming through. Some of that lower cost may need to be passed through to be competitive. Overall, I think growers are. A shift that has occurred for the 2023 season versus the 2022 season is growers are going into the 2022 season were just concerned about getting supply at any cost. The push was, you know, get everything in Q4, make sure it's in the barn. You know, for this year, I think people seeing that prices softening, we're looking at Q4 as, okay, we don't have to have it right now. We can do more just in time and hope that prices come down, before we actually purchase and plant. I think that's kind of what we're seeing. As far as our margins, I think we feel pretty good about where we are. Got it. That's helpful. Twice you mentioned that AZTEC orders are at this juncture in the first quarter 3- 4x, quote-unquote, "normal seasonal levels." I'm just looking for some more context around that. Is that simply because some of the, you know, orders that were not fulfilled in the fourth quarter? Is there double ordering for from certain customers to try to get, you know, safety stock? Or how much of this is a function of, you know, simply higher corn acreage this year? Have you... A follow-up on that maybe, you know, looking at the USDA forecast for higher corn, how much of that is in, you know, kind of the addressable market for these soil applied insecticides, which is really just the, you know, the heart of the corn belt? Some additional context might be helpful. Yeah. I mean, going into the year, we did see growers stepping up for what they anticipated, one, be a strong commodity price. Two, corn rootworm pressure seems to be increasing year-over-year. The bulk of what I'm addressing is these are orders that didn't get filled in fourth quarter. Our team went out to everybody as we had this AZTEC issue and said, "Okay, here's the amount of AZTEC we feel comfortable. We may get, you know, to everything that you need for AZTEC. For now let's place a kind of a supply chain." This is what, you know, each one kind of allocated out would get for AZTEC. Then, some additional orders for Counter, Force, and Smart Choice, that would make sure that they're gonna be able to meet customer demand. You know, as we go through, the next month and a half, we'll get a much better picture of what% of the original AZTEC will be met with AZTEC. If we do all of it, great. We produce, more of the other corn soil insecticides, to make sure that every grower out there gets corn soil insecticide, in order to treat his field. Eric, what are the chances or the risks that because of this issue, you will have lost some opportunity or acres with, you know, to an alternative to soil applied insecticide? Can you. Yeah. I mean, the alternatives are really us, right? I mean, Syngenta has Force and Bag, but going through the SmartBox system, and SIMPAS, obviously that is our business. I don't think... I mean, I think growers will use the product they intended to use. I don't think they're gonna not use product. I think it's a more a function of what of our corn soil insecticides they will use. Got it. Last one. Since you weren't manufactured synthesizing or compounding this product, I guess, in the fourth quarter, just curious if you could quantify the impact to the absorption variances and gross margins. Does that carry through into 2023 at all, or is it isolated in fourth quarter of 2022? Thank you. Yeah. Fourth quarter, you know, there was the other half of the AZTEC molecule that we were not able to make, but there's another section that that does get made and we continue to make that at the Axis facility in Q4. Though the second half of the molecule, that then gets combined with the first piece, we didn't make, which is true, so absorption wasn't as high. Again, you know, we'll be doing that in Q1, and into the beginning of Q2. Overall, we're not seeing any major impact. Thank you. Thank you, Chris. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments. Okay. Well, thank you everybody for getting on the call this morning. We're looking forward to this 2023 year. We'll be giving kind of the normal guidance that we do for the year at the next call, which I think we're currently scheduled for March 13th. Look forward to updating you at that point, and have a great day. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.