Good morning, and welcome to the Whole Earth Brands first quarter 2022 results conference call. All participants will be on a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the conference over to Jeff Sonnek, Investor Relations at ICR. Thank you, Sir. Please go ahead. Thank you and good morning. Today's presentation will be hosted by Albert Manzone, Chief Executive Officer, and Duane Portwood, Chief Financial Officer. Executive Chairman Irwin Simon is also participating on the call and will be available for Q&A. The comments during today's call and the accompanying presentation contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the Company's filings with the SEC. We'll also refer to certain non-GAAP financial measures today. Please refer to the tables included in the earnings release, which can be found on the investor relations website, investor.wholeearthbrands.com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. Additionally, we've provided a supplemental earnings presentation on the IR website that may be useful in your analysis of the company's performance. With that, I'd now like to turn the call over to Albert Manzone, CEO. Thank you, Jeff, and thanks to everyone for joining the call today. We are pleased to report our first quarter earnings results. We delivered consolidated product revenues of $130.6 million, which represents a pro forma organic constant currency growth of 4.9%. We generated adjusted EBITDA of $18.2 million at constant currency amid a fluid geopolitical, economic, and supply chain backdrop. Since we last spoke in March, the environment has been further complicated by geopolitical events that prompted an acceleration in input prices. As we have shared previously, our focus on our global supply chain prior to the pandemic has provided us with an ability to remain in a proactive stance with a sound plan of action to ensure that we have the tools to defend our business and our margin profile. We believe we have strong foundation with an advantaged supply chain, strong global diversification across our business segments, brands, channels, and geographies, and strong innovation and distribution engines to drive growth. During the first quarter, our primary focus was the ongoing execution of our North American supply chain reinvention project. We significantly ramped up production at our new Alabama facility that services our branded CPG business. March production was at its highest level in over a year and was nearly 3x our January production rates. As a reminder, we accelerated our North America supply chain reinvention project in fourth quarter 2021 to help us solve for supply constraints. The primary thrust of this strategy was focused on taking control of select production from a co-packing partner. The transition of these operations and the improvement in production run rates in the first quarter was critical to increasing our fill rates with customers and restore customer service levels. This is most visible in the sequential step-up in growth from our fourth quarter, where growth was constrained by supply shortages to the 3.3% organic constant currency growth in branded CPG we achieved in the first quarter. While the transition to a higher throughput pressured margin in first quarter, this dynamic was anticipated, and importantly, we entered the second quarter with confidence in our full year guidance that we are reiterating today. Beyond the supply chain, we are also combating inflationary forces through a combination of tools, including price, gross net optimization, productivity, and prudent expense management. We're committed to defending our margins and will be using these tools to ensure that we continue to deliver on our commitments to the market and delever our balance sheet this year through organic means, both of which are key priorities for us in 2022. First, an update on our pricing actions. Our retail partners implemented our price increase, which was reflected in store in March. This amounted to an average increase mid-single digit across our branded CPG portfolio and an approximate 3% positive influence on revenue growth in the first quarter. Elasticity is something we're watching carefully alongside the rest of the CPG industry. Given the ongoing intensity on inflation and new variables such as accelerating diesel prices, we'll reserve the right to implement additional price actions as necessary. Second, productivity. As we discussed last quarter, another element of our supply chain reinvention project is SKU rationalization. Essentially, we're trying to better align our production to demand and where appropriate, we're eliminating underperforming SKUs and reallocating those resources toward innovation. This is an excellent complement to our price strategy and something that we can control in response to external forces. Third, expense management. We are already a fairly lean global organization, and we're being vigilant about adding expenses in the environment. First, we have postponed some headcount additions and are selectively reducing spending on discrete projects where they are not revenue-generative in nature. Again, this is all geared toward a goal of ensuring that our business is in a nimble position to react to market dynamics and still deliver on our financial goals. Net, we are making progress since we last spoke with you on our fourth quarter earnings call. We have production back, we have pricing in place, and we have ongoing productivity measures that are helping us drive a recovery in branded CPG margins that will carry through the year. On our flavors and ingredients business, the team is doing an exceptional job. For the first quarter 2022, we drove a 12% increase in segment revenue. This is the second quarter in a row of strong double-digit growth and is the result of strong volume growth across our diverse product categories. We're succeeding at driving adoption of natural, non-GMO flavor-enhancing licorice-related ingredients in our end markets across food and beverage, cosmetics, healthcare, and industrial. Our new leadership and critical investments in R&D and sales in 2021 have been instrumental in shifting our commercial approach to the diverse end markets that we serve. This is visible in our innovation and product development strategy, which now clearly maps to the various applications across our suite of Magna-Brands products to drive use and sales growth. Our sales team is also focused on enhancing our relationships through direct relationships and having some great successes. Further, our flavors and ingredient team is also benefiting from our footprint optimization project. As you may recall, we transitioned our North American operation from New Jersey to a state-of-the-art facility in Virginia last year. With that has come a significantly improved cost structure, which results in the ability to drive more competitive pricing. Taken together, the team has the tools necessary to drive growth, and we're very excited about the results they are generating for the business. We continue to view flavors and ingredients as a strong free cash flow generator with high barriers to entry and global leadership position that will support our broader growth initiatives as we further diversify and grow Whole Earth Brands. Further, flavors and ingredients brings diversification in both revenue and cash flow that is valued in a fluid environment such as this, allowing us to deliver greater consistency in our operating results. In summary, our proactive efforts across Whole Earth Brands are creating a stronger foundation that we will build upon. We're pleased with our progress to meet our goals for 2022. Whole Earth Brands is the global leader in the better-for-you sweetener and reduced sugar categories. Our team continues to pursue four priorities. First, disrupt the massive $100 billion total addressable refined sugar market, which is being displaced by fast-growing sweeteners. Second, drive category leadership through best-in-class innovation and brand building, expand our global distribution, and leverage our strong supply chain capabilities. Third, continue to build out of ESG credentials and evolve our brands and product portfolio towards becoming a large organic, natural, plant-based food company. Fourth, deliver on our balance sheet. We believe we will reduce leverage in 2022 through organic means as we deliver profitable growth and significant cash flow generation. With that, I will pass the call to Duane for his financial review. Thank you, Albert, and good morning to everyone. As a reminder, we acquired Wholesome on February 5th, 2021. I will speak to reported results which include Wholesome for the full first quarter of 2022. Additionally, we will provide some selected pro forma results as if we had owned Wholesome in 2021 to assist in your analysis of the organic growth of the combined portfolio. Also, please refer to our non-GAAP reconciliations at the end of the press release for additional detail. I encourage you to view the supplemental earnings presentation on our investor relations website. For the first quarter ended March 31st, 2022, consolidated product revenues grew 23.4% to $130.6 million versus the prior year quarter. On a pro forma basis, including Wholesome for the full quarter in both the current and prior year periods, organic constant currency product revenue increased 4.9% versus the prior year first quarter. Reported gross profit was $39.6 million compared to $35.7 million in the prior year first quarter. The increase was largely driven by contributions from the Wholesome acquisition, pricing actions, and the $3.2 million favorable change in non-cash purchase accounting adjustments related to inventory revaluations, partially offset by cost inflation. Reported gross profit margin was 30.3% in the first quarter of 2022, compared to 33.7% in the prior year period. Adjusted gross profit margin was 32.8%, down from 36.9% in the prior year, due primarily to the inclusion of Wholesome in 2021, which had lower margins and previously mentioned cost inflation. Consolidated operating income was $7.1 million compared to an operating loss of $3.1 million in the prior year first quarter. Consolidated net income was $2.7 million compared to a net loss of $12.0 million in the prior year period. Consolidated adjusted EBITDA of $17.8 million increased 1.8%, driven by the contribution from the Wholesome acquisition and revenue growth, partially offset by $0.4 million of unfavorable foreign currency. Now shifting to the segment results for Q1. Branded CPG segment product revenues increased $22 million, or 26.9% to $103.8 million for the first quarter of 2022, compared to $81.8 million for the same period in the prior year, driven primarily by the addition of Wholesome. On a pro forma basis, organic constant currency product revenue increased 3.3% compared to the prior year first quarter, primarily due to pricing actions taken throughout the quarter. Overall, volume was flat. However, excluding the discontinuation of certain legacy private label SKUs, branded CPG volume increased 2.1%. Operating income for the branded CPG segment was $6.5 million in the first quarter of 2022, compared to operating income of $10.2 million for the same period in the prior year. The decrease was driven by costs associated with our supply chain reinvention project, the impact of cost inflation, and an unfavorable impact from the stronger U.S. dollar, partially offset by a full quarter of Wholesome results and revenue growth in that business. Flavors and ingredients segment product revenues increased 11.7% to $26.8 million for the first quarter of 2022, compared to $24.0 million for the same period in the prior year, primarily due to strong volume growth in licorice extracts and derivatives, driven by commercial expansion and innovation. Operating income for the flavors ingredient segment was $7.8 million in the first quarter of 2022, compared to operating income of $1.0 million in the prior year period, primarily due to revenue growth and a $2.3 million favorable change in purchase accounting adjustments related to inventory revaluations and a $1.7 million favorable change in restructuring and other expenses. Operating expenses for corporate for the first quarter of 2022 were $7.2 million compared to $14.2 million of operating expenses in the prior year period. The decrease was primarily due to lower M&A transaction fees. Now moving to cash flow and the balance sheet. Cash flow provided by operating activities for the quarter ended March 31, 2022 was $4.4 million. That is net of $4.2 million of non-recurring or unusual items primarily related to our supply chain reinvention project, along with M&A transaction-related costs. Capital expenditures for the quarter ended March 31, 2022 were $3.3 million. Free cash flow, excluding the non-recurring or unusual items, was $5.4 million. As of March 31st, 2022, we had cash and cash equivalents of $29.4 million and $412.9 million of long-term debt, net of unamortized debt issuance costs. Note that our long-term debt increased from year-end 2021 due to the cash portion of the Wholesome earn-out, where we paid $30 million in cash and approximately $25 million in equity to those principals on February 23rd, 2022. Our net debt to adjusted EBITDA ratio at March 31, 2022 was 4.53x. Reducing balance sheet leverage continues to be a corporate priority, and we anticipate that we can reduce leverage by approximately 0.2 turns through organic means by year-end 2022, as implied by the midpoint of our guided adjusted EBITDA range. Now shifting to our full year outlook. We are reaffirming our 2022 guidance, which includes the full year impact of the Wholesome acquisition. As a reminder, our outlook represents our expectations for growth on a pro forma organic basis. We define pro forma organic growth to be as if the company owned Wholesome for the full year 2021. For 2022, we continue to expect consolidated product revenues to be in the range of $530 -545 million, representing reported growth of 7%-10% and pro forma organic growth of 3%-6%. We continue to expect consolidated adjusted EBITDA in the range of $84 -87 million, and we continue to expect total capital expenditures will be approximately $10 million. That concludes our prepared remarks. Operator, now back to you. Please open up the call for Q&A. Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one to register a question at this time. The first question is coming from Brian Holland of Cowen. Please go ahead. Yeah, thanks. Good morning, everyone. If I could just start with, I guess two on the top line. Just curious about the source of the U.S. share erosion that you called out in your deck this morning. When is that all tied back to the supply issues and when might we anticipate an inflection there? That would be the first thing. The second thing is, how long, as we look in our model, should we anticipate that ongoing SKU rationalization to remain a drag on volume? Good morning, Brian. This is Albert, and let me take the first question, and then I would start the second one and let Duane finish on it, if that's okay. With regard to share, and thank you for referring to the supplemental deck, which we try to give as much transparency as possible. As you did mention, there is an impact on share which started in Q4, continued in Q1, essentially for a big part driven by the supply chain disruption, as we have talked. That has obviously driven some product shortages on the shelves, across all retailers, and that has impacted share across most of the brands. That's really, I would say, the key driver. The good news is, as we have reported, our supply chain reinvention, we're very happy with the progress. We were still short on January, February, and then March was our highest production month. We are getting back to serving all customers the way we want to, the way they expect, and the way we have always done it. With that, what you are going to see is a restoration of the share, toward the second half of the year, later in the year. It takes time, of course. That has had also a compounding effect, as you can imagine, on how many promos you can run and those type of activities when you compare year-over-year with what you were able to do, on the prior year, which, by the way, in Q1 was a heavily COVID period. I would say this is really what it is. What I can also tell you is that we're very excited about our innovation, very excited, and the customers are very excited about what we see in terms of innovation wins getting into the second half and the brand-building initiatives. Again, if you look at our supplemental deck, you will see that we are gaining share across all our markets we're in, except the U.S. That's also the one place where we do have supply chain constraints and have had them until the month of February. That bodes well for the second part of this year. With regard to your question on the private label, this is, as we explained last year, an opportunity also considering the environment we are in, to remove poor performing SKUs from a gross margin standpoint and make space for innovation. You are going to see that effect throughout the year in a balanced way. Duane, anything you want to add on that? No, that's exactly right. Good morning, Brian. As we had discussed previously, it's about a $10 million impact year-over-year, and that is spread pretty evenly across the four quarters, including Q1. Got it. I appreciate the color, Albert, Duane. Curious here, excuse me, on demand elasticity. Just kind of any early reads. Obviously there's a lot of moving parts in your numbers, but if we just kind of drill down on the consumption, you have a portfolio that plays across pricing tiers. So just kinda curious what the interplay looks like, as you start to roll pricing through. Right. Great question. We have taken price globally across all of our markets. The percentages will vary depending on, you know, the type of inflation you have in any given market. If you look at the U.S., our price increase on average is a mid-single digit. That price has really, as you know, customers have a 60-90-day window. Those prices which were communicated early January really went into effect more into March, which is going then to impact us further from a margin standpoint, Q2. It impacted really one month out of our Q1. From a pricing elasticity, I would say that we have assumed some of that. In our calculation, we have assumed pricing elasticity. How much will happen? I think the inflationary environment we are in, Brian, is unheard of for the last few decades. I think we were all being very prudent and making sure, as you said, and I think that's one of the great benefits of all our brands, making sure that we have a portfolio that can play across all price points. I would remind you that, you know, with the U.S., we are positioning the premium natural brands. We're positioning the mainstream natural brands. We're positioning artificial, which tend to be more on the value side from a pricing standpoint. We have a strong presence. We hold some into private label, which again is a great place to be in those times. We have reflected in our pricing. We have taken into account some elasticity from all the historical modelings. I don't know how good the historical models are going to be for the future, but we have a very resilient portfolio. Right now we're happy with how that addresses our costs. We will continue to monitor the environment very carefully, both in terms of pricing elasticity and activities with consumer as well as pricing inflation going forward. Appreciate the color again, Albert. I'll leave it there. Best of luck. Thank you. Thanks, Brian. Thanks, Brian. Thank you. The next question is coming from Scott Mushkin of R5 Capital. Please go ahead. Hey, good morning, everybody. My first question is on flavors and ingredients. I mean, obviously, you're seeing some pretty heady growth in what I always had modeled out as a pretty slow, good cash flow business. I was wondering, are you thinking a little differently about this business long term, that it could grow perhaps just a little bit faster? You know, kind of get your thoughts there. Yeah. Good morning, Scott. First of all, I want to congratulate the whole team at Flavors and Ingredients, which I'm sure are listening on this call and fantastic job from them in Q4, as you have seen, and Q1. The business from our standpoint is essentially on track. We're very happy with the payback investing into the business as we have talked previously, both from an R&D standpoint, and you can see new applications coming across food and beverage, cosmetics, pharmaceuticals, industrial, and also from sales force that allow us to go direct to some of the key customers versus at times going through distributors in the past. We continue to see momentum, and we expect momentum going in Q2 and forward. At the same time, very similar to what we're doing with supply chain reinvention in our branded CPG right now in the U.S., and we just talked about, you know, the short-term impact of it. Let's remember that flavors and ingredients went through a very similar exercise in 2021, and we're also overlapping that manufacturing footprint optimization, which was the closing of our Camden, New Jersey plant and opening a smaller state-of-the-art facility in Virginia. I think we're reaping now the benefit. We have good overlaps, and the business is on track and very happy about what the team has done there. Okay. My second question goes to the inflation. I know you gave some color already on, you know, what you put through and when it's gonna, you know, be in the marketplace or is in the marketplace. What are you seeing right now on input costs? You know, most of the companies I'm talking to say there's gonna have to be another round of price. How are you thinking about that? What's going on with your input costs? Is that something that you guys are contemplating as you go forward? Scott, with regard to inflation, first of all, we are seeing high single-digit inflation, and essentially, which is consistent with what you will hear, right, on the earnings from most of the other CPG. What I will tell you is a few things here. Number one, is we have taken pricing, which I talked about, which is now reflected. We had done some last year. The combination of both and what we're doing in the U.S., we feel comfortable at this time. I will add to it that, the work, and I want to salute again the work that our supply chain global team and U.S. team are doing, had started way before. The supply chain reinvention, which we put in motion right at the time of the Swerve and Wholesome acquisition, and which we accelerated the first half of last year, essentially is addressing some of those inflationary concerns, coupled with smart revisions that have been done a year ago. Those are essentially the actions. With that, we are obviously not resting, and we're adding further productivity. We're adding, as I have said just earlier in my scripted remark, productivity in terms of our SG&A. We're being very attentive across the line. So far, we feel good about what we are, but obviously we're in a very fluid environment, and we will reserve the right to take further actions if needed based on how the environment evolves, to make sure that we deliver what is expected of us. As I said earlier, we feel comfortable at this point in time to reiterate our guidance for the year. To interpret that out, you think you won't need any more with where things stand now, but, you know, obviously reserve the right. Is that a good interpretation of what you said? Correct. Okay. All right, I'll yield. I have some more, but I'll take that offline. Thanks, guys. Really appreciate it. Thank you. Thanks, Scott. Thank you. The next question is coming from Bobby Burleson of Canaccord. Please go ahead. Yeah, good morning. So I guess the first one is just, you know, looking at flavors and ingredients, curious how broad-based the strength is there, and maybe if you could kinda revisit that for us in terms of the revenue mix across some of those end markets. Sure. Hi, Bobby. It is broad-based. Hi, Albert. As you know, what I would tell you is we start with a competitively advantaged supply chain. We start with a market-leading share and position globally in one ingredient, which is licorice. That's a good place to be. Number two, we did significantly lower our cost of production through the manufacturing footprint, which essentially puts us at a cost advantage across multiple usages. Number three, we do have a very diversified end-user base, which are going to be in food and beverage, cosmetics, healthcare, and industrial. We see right now, because of the combination of good cost, the ability to work directly with R&D of multiple of those end users in terms of providing the benefits and working on their product with the benefits of licorice. We do see. The abilities and to reach more customers directly through a revamped sales force on a global level. I would say that the momentum is broad-based in terms of the end users, in terms of the type of industries and also globally. You know, as an example, we did step up our sales force in all of Asia, and we're seeing significant growth there, not because the growth was not there before, but because we were not able to access it or we were accessing it too indirectly and passively. All those efforts have really been put in place with the vision of Irwin as soon as we went public, and I think this is yielding good results as we speak, as we expect. Great. On the non-revenue producing projects where you're selectively reducing spending, any examples of, you know, the low-hanging fruit there in terms of types of projects you could reduce spending on this year? Sure. Duane, do you want to take this on? Yeah, sure. Morning, Bobby. I think the biggest example is really just more on the technology side in terms of, you know, we're pretty integrated right now. We're working pretty well. There are areas where we wanna explore where we might be better. It's items like that that we're just saying, "Okay, well, 2022 is maybe not the best year to do that. Let's attack that after 2022, and for now focus on execution and the like. Okay, great. Just last one. In terms of supply chain disruptions, I know you guys did some proactive inventory build last year, which turned out to be very timely. I'm wondering just with, you know, the war in Ukraine, etc, are there areas in your ingredient set that you're maybe a little bit more concerned about where you could initiate another, you know, pre-buying activity this year? Right. Bobby, on this, I would say, first and foremost, we don't have any ingredients really coming from Russia and Ukraine, so we're not impacted directly. Obviously, a lot of people suffering there, and our thoughts and prayers go to those nations. With regard to the indirect impact, which is obviously what I'm thinking about more also when I was talking earlier with Scott, that we're very vigilant. One of our models, and you started with flavors and ingredient is built into our model, we have one year of supply on the ingredients, so we feel comfortable there. Similarly, on Wholesome, we have supply on hand. With regard to the rest of the ingredients, we have done a few things. As you mentioned, not only did we pre-buy, but we also brought all those key ingredients close to the point of production. They are localized in the right geographies, and that is also a de-risking that we did take. From a procurement standpoint, I would say that our teams are very aggressive and always looking forward. As we speak now, they're working on 2023, and we would do what is right in terms of, as you said, ensuring continuity of supply, but we don't see any disruption risks at this point in time. Great. Thank you. Thank you. The next question is coming from George Kelly of Roth Capital Partners. Please go ahead. Hi, everybody. Thanks for taking my questions. I have a couple for you. First on your guidance for the year for EBITDA. Just curious. I guess with revenue and EBITDA. Revenue, I mean, the number you just posted in the first quarter, if I go to your full year, it looks like there's some modest sequential sort of improvement in versus what you just reported, but EBITDA, it's more substantial, the improvement is. It sounds like, you know, pricing should have a good flow through, but what else can you point to that gives you confidence that you can hit on that sequential uptick in EBITDA? Do you want to take this on, Duane? Good morning, George. Yeah. Morning, George. Yeah, I think the two big things to think about, George, as it relates to that progression would be, first of all, we did have you know, a price increase versus cost inflation mismatch during the first quarter. You know, inflation was present, you know, starting at the very start of the year. As Albert mentioned, in his commentary prepared and in the questions, pricing, you know, was in effect throughout the quarter and really didn't come into full effect till the last half of the quarter. Pricing is going to help from an EBITDA perspective. We did have a little bit of supply disruption in January and February, so that'll help from an EBITDA perspective as well. Those are the two main drivers in the uptick in EBITDA. Okay. Second question for me is on free cash flow. Wondering if you could help us just in round numbers bridge from EBITDA to free cash flow. I know you've provided CapEx, but should there continue to be kind of one-time things that'll impact free cash flow or where do you expect. I mean, if you could just provide a number or a range that would be helpful. I'm not sure you wanna do that, but anything unique to call attention to? Dwayne? I went on mute. Sorry about that. Yeah, George. So on free cash flow, you know, if we think about adjusted EBITDA in the mid-80 range, you know, we guided 84- 87. The things to consider, of course, are we have cash taxes, which will be in the high single-digit millions, we expect. Interest expense, low- to mid-20s. CapEx in the $10 million range. Then from a cash related add back perspective, we did have about $4 million in Q1. I expect that to significantly decrease in Q2 going forward. Maybe a little bit in Q2, but significantly less than what we saw in Q1. I expect that to continue throughout the year. I expect cash related add backs in the mid single digit millions. Then the big thing that can swing things is net working capital. Last year, net working capital was a use of about $20 million. I expect that to be significantly less as well this year. There is some seasonality to that, and it's different by quarter of course. You know, at the end of the day, right now I'm expecting free cash flow for the year to be somewhere in the mid- to high 30 millions. Okay. That's really helpful. Thank you for that. Last one for me is your leverage. I think you said in your prepared remarks you expect something like 0.2 turns of improvement by year-end. So I guess two-part question. Wanna make sure I've heard that correctly. I have you right now at about 4.7x. Just wanna make sure that I have that right, that you're going down to 4.5. Then the other part of the question is, where do you need to get as far as that ratio to again become more comfortable considering M&A? You know, I understand that deleveraging is a real priority right now. At least that's what it sounds like. Am I hearing it right that M&A is really not a priority right now until that gets in a better position? I'll take the first. Well, I'll take all of that and then Albert can add in where I miss some things. Glad you asked on the leverage ratio. The 4.53 is really based on our current debt balance and then using the midpoint of our guidance range. That's the 4.53. The 4.7 is on a last twelve months basis. It's 4.69 actually. But the 0.2 turns, going back to that. It's really based off of that 4.53. In other words, what we're saying is, you know, 0.2 turns actually. I'm sorry. It's based off of where we ended 2021. We ended 2021 at 4.37, and based on the cash flow that I just took you through, I would expect that to come down by about 0.2 turns. We'll be in the low 4s, is my expectation by the end of the year. Okay, great. The M&A part of that? I think, you know, as we talked about at the end of our Q4 call, you know, priority number one is execution. Although, you know, across the enterprise, but obviously with particular attention to North America and supply chain stability there. We do continue to look at the landscape on the M&A side, but it's the priority really is execution. As it relates to kind of what leverage ratios that would make us more comfortable. We're always gonna be thoughtful, so I hesitate to say more aggressive or anything like that. We're only gonna do deals that make sense at the price that makes sense. you know, I think clearly we have more flexibility when we have a leverage ratio in the threes versus the fours. Duane, let me just follow up on that. Hi, George. It's Irwin Simon. Listen, we built this company to grow it both, you know, globally and to do M&A. With that, I think there's a good plan in place to take costs out. We have an incredible infrastructure in place. We have a company today that has the ability to put another half a billion dollars of sales on top of here. M&A is important, but, you know, having that right leverage is too. I think, you know, getting the operations right, you know, we've only been public for, you know, two years, but we are seeing some interesting stuff out there. If the right thing came along where there is some good EBITDA and there's some costs that could be taken out, M&A would be something we would look at here. I don't wanna rule out total M&A, but I think there's a great plan in place. How do we grow this business? How do we reduce costs? Your question in regards to how do you get to that EBITDA on the back end, you know, is an important question. I think, you know, M&A is something that is a part of our DNA and, you know, that's something that I look to build this company on, is M&A at the right time and the right company. Okay. Thank you. Thanks, George. Thanks, Irwin. Thank you. The next question is coming from Mark Smith of Lake Street Capital Markets. Please go ahead. Hi, guys. Most of my questions have been hit, but just wanna hit two kind of big picture things. First, as we look at distribution, you know, anything to call out as far as new retail partners or shelf expansion? Sure. Good morning, Mark. As I said, let me back up, right, by saying that the first quarter was per our expectation. This is an incredible category, right? It's $100 billion total addressable market, and it's not discretionary whether the economy is up or down or inflation is up or down. There is a lot of opportunities. We are very well diversified, right, across the aisle. I will tell you, and I don't want to disclose too much, one, not to upset some of the retailers and not, two, for competitive reasons, but we are excited about what we're doing in terms of the power of one and ability to win on the shelves. We are seeing a growth and opportunities that. You have some of them, and some of them we didn't disclose in the supplemental deck. We have those scores that will materialize in the second half, with the shelf reset. We're also excited about some of the adjacency work we're doing, right? We have the baking mixes, we have the chocolate chip cookies with Swerve, we have the baking mixes with Wholesome. There you have also seen good distribution wins. One of the things I like about those adjacencies, which we take a page from our international markets, is that they give you more points of introductions into the store. They also do source new users, new consumers that then discover eventually your sweeteners. This is a very virtuous circle, and we're happy. Of course, we have had to mend some in Q1, as I talked earlier, because, as Irwin said earlier, the first thing that you want is to be at the 99% customer service level before you push. But we're getting there with the progress of our supply chain reinvention, and we see ourselves in a good place for those distribution wins that are taking place as we speak for the second half. Perfect. Al, you talked about a little bit about, you know, my next question was which is just, you know, inflationary pressures, you know, high gas prices, any impact on the consumer. Mm-hmm. Trends, and if you see any, you know, trade down out of your product as we see, you know, tough inflationary environment for consumers? Right. Let me take the opportunity here. We haven't talked about it on the call yet, but also to talk about, you know, a very well-diversified channel mix. We do see continued growth in e-commerce. As you know, this is a good place to touch a number of consumers. That's now 10% of our mix in the U.S., and we still have pockets of opportunities on Swerve and Wholesome. We do see good growth on food service, right? Which has been coming back. As you know, inflationary pressures there has been a little bit lesser than retail. There, we're very happy with, you know, we grew high single digits% in the first quarter in that channel. We see obviously good growth in club where, you know, you can play value both in terms of downsizing packaging, but also upsizing and providing more value. We are doing also both, in terms of value optimization. Pricing is obviously one aspect, but as you know, it gets much more sophisticated than this as you play that game. There is opportunities that we are taking in terms of packaging optimization, both in larger pack or smaller packs. The important thing is to have this whole array. We have great brands, with our four brands. We have great innovation. As per your first question, scoring wins in distribution. We have a very well-balanced, not only portfolio, but also channels, which essentially bodes well. That being said, we remain extremely vigilant. This is a very fluid environment. Nobody knows if we're going to be in a recession or not a recession in the Q4 of this year, and therefore we remain extremely vigilant, and we work all the angles constantly. Perfect. Thank you. Thank you. The final question today is coming from Alex Arnold of Odeon Capital Group. Please go ahead. Hey, guys. Good morning. Albert, I think you just answered my question. I guess the other than channel mix and shift that you're seeing, I guess, you know, the extension of that is as the wallet gets squeezed, are you seeing? Because you are so well set across price points, are you seeing real signs of trade down and substitution effect yet? Hi, Alex. I would tell you that right now we don't see any dramatic shifts, but we are prepared for any that might happen. We haven't seen yet. I think consumers, I mean, nobody knows, right, exactly. Consumers don't exactly know where things are going to go. Right now, I think it's still balanced. We are prepared for, as I said, both, in terms of channels, in terms of our products, in terms of our price points, in terms of upsizing and downsizing, we are prepared, and we continue, and that's, as Irwin said earlier, one of our strengths of our global manufacturing footprint. We continue to take learnings across the world and play with that, which is extremely helpful as we speak. We saw good growth in international, some regions more impacted. Overall, we haven't seen anything dramatic at this point yet in terms of rebalancing. I think if there is something playing out, it will play out more. That's because we're well-balanced, that's why we feel comfortable with the year. Great. You touched on this one as well, but in terms of products adjacencies, sort of new innovations that are now on the shelf, are there any specific anecdotes or updates that you can give us as to how uptake's been relative to expectations and sort of timing of when you start seeing additional ones roll? Right. The biggest anecdotes, I'm not going to reveal them for competitive reasons, but I would say that in the same context of the first question you just asked, I think there is growing opportunities for us in the better for you and price points and brands established across several adjacencies. I think you are going to see this playing out in the second half and first half of next year as we have productive, interesting, important talks with different retailers. As well, we see from an adjacency, this is already a $20+ million business in international. For us, we're present in several categories. We're able to source new consumers to our brands. We're able to have multiple points of interruptions in the store. I think with our team in North America, which is doing a great job across all the brands coming together, working together, we do see opportunities in North America too. Great. Thanks a lot, Albert. Thanks, Alex. Thanks, Alex. Thank you. At this time, I'd like to turn the floor back over to management for any additional or closing comments. If you allow me, first of all, thank you all. I will let the closing words to Irwin, but I just want to thank you all for being on this call. I think our first quarter was as expected, and we're happy, of course, with that. We are looking at a category that is extremely resilient, and it's not discretionary. We have a huge addressable market, and I think as we have talked multiple times, we are very well diversified. We have great brands, innovation and distribution opportunities, both in the U.S. as well as globally. Duane and I are comfortable with what we see. Looking forward to the follow-up calls with you and comfortable reiterating our guidance. With that, I will pass it on to Irwin. Thank you, Albert. Good morning, everybody. Listen, it's difficult times out there and times that we have not seen and, between inflation, labor, supply, but they're all things that we have to deal with out there. I think the exciting thing is Whole Earth Brands owns today some great brands, some great product lines. You know, lots of good things coming out of Mafco, which is a unique business with tremendous growth opportunities and great margins. The uniqueness about, you know, Whole Earth, it got distribution in ultimately 80 different countries out there, and got a good foothold in product. Products that the consumer wants in regards to stevia, organic sugars and sweeteners, and licorice ingredients. You know, in regards to, you know, building this company out there's lots of opportunities out there. One of the big things, we don't rely on co-packers as we've gone out there and built out our Birmingham facility. You know, we have a great facility within the Czech Republic. We have a great facility, as Albert talked about, in regards to, you know, Virginia, which we've done with Mafco. It's all coming together in a good way. We reconfirmed guidance for the year. Hopefully, we do not have to take pricing. If we have to, we will. We'll watch what our competition is doing out there. We have in place an excellent management team. The strategy is there. I've seen a lot of the innovation. I know you asked about a lot of the new products. You know, some things have gone right, some things have gone great, and some things have just not worked out in regards to some of the new products, but the team continues to work on them. You know, again, as a company, that's a smaller company, but lots of opportunities within the food space. You know, I've mentioned before there is lots of acquisitions out there. There's a lot of plant-based companies today that are looking for partners and opportunities. With that, it's important for us to have our good base, our good cash flow. You know, how do we reduce our debt? I think, with that, Whole Earth will continue to grow its distribution, grow its products, and ultimately look at acquisitions. With that, thank you very much and congratulations to the team and look forward to speaking to you all soon. Ladies and gentlemen, thank you for your participation. This concludes today's event. 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