Good morning, and welcome to Whole Earth Brands Second Quarter 2022 Results Conference Call. All participants are in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, today's conference is being recorded. At this time, I would like to turn the conference over to Jeff Sonnek, Investor Relations at ICR. 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 today 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 our 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 investor relations 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. I'm pleased to report the business delivered consolidated product revenues of $133.5 million, an increase of 8.5% on a constant currency basis and 5.5% on a reported basis, and generated $19.7 million of adjusted EBITDA. These results were consistent with our plan and made possible by our team's hard work amid this challenging operating environment. Our North American Supply Chain Reinvention project allowed us to improve customer service levels and meet demand, which supported 8.1% constant currency revenue growth for the branded CPG segment during the second quarter. Our Wholesome sweetener business continues to perform strongly, which helps drive an approximate 2% increase in volumes at our branded CPG segment, excluding the impact of our SKU rationalization initiatives. Our emerging international market sales comprise of Asia Pacific, India, Middle East and Africa, and Latin America, which represent approximately 15% of our branded CPG segment, all increased at a double-digit growth rate during the second quarter, confirming the strong secular demand trends for our categories and products. Additionally, segment revenue growth was further supported by price actions that were instituted in response to inflationary forces. Our flavors and ingredients segment continues to carry momentum with above-trend growth rates and positive constant currency revenue growth of 10%, driven by both volume and price. Our concerted effort to drive use in new markets and categories has been central to these results. While we navigate the ongoing market disruptions and macroeconomic headwinds, we remain undeterred in our mission and core strategy. Despite the temporary shifts in consumer behavior, the underlying long-term trends remain more relevant today than ever, and our mission to help consumers achieve healthier lifestyle remains at the heart of our growth strategy. The health and wellness forces at play are powerful. In fact, 73% of U.S. consumers are trying to limit or avoid sugars, which speaks to the increased focus on personal health. Globally, our premium and baking-oriented brands such as Wholesome, Swerve, and Whole Earth are successfully addressing the expected shift to at-home indulgence and healthier lifestyle. Our mainstream brands such as Canderel, Equal, and Pure Via continue to address shopper needs for accessibility, affordability, and quality. As we look ahead to the other side of this macroeconomic cycle, we believe our portfolio will be even stronger. Our slate of innovations is especially exciting as we head into the second half of this year. We have several launches planned this fall around the holidays and the ramp-up of the baking season. Our new innovations are tapping into a high-growth segment of sugar substitute with monk fruit, which is seeing consumption growth of more than 30%, and allulose, which is growing at more than 40% versus a year ago. We are reinvigorating Swerve, which is a leading natural baking product used by 2 million loyal households by launching exciting new innovations to tap into new product and adjacency cross-purchases. We will launch Swerve products with natural monk fruit and allulose sweeteners. You will also see us in the market with blends such as monk fruit and cane sugar to help consumers transition toward a sugar-free lifestyle. Another innovation we're especially excited about is Swerve No Sugar Added Chocolate Chips in the baking adjacency. Chocolate baking chips have a strong natural link to existing Swerve baking behaviors and is a segment of interest for sugar-reducing consumers. Our innovation efforts have also driven our share growth across our international markets, where today the Whole Earth Brands portfolio holds number one position for the year-to-date 2022 period. For example, take our work in Australia, where we now have almost 23% share of the natural segment, which increased nearly 16 points over the past two years following the introduction of our Baker's Secret products and monk fruit raw sugar innovations under the Whole Earth Brands. Additionally, our focus on availability remains at the forefront of our Power of One sales strategy, with our team gaining 1,700 additional doors in North America across our brands through the first half of 2022 versus a year ago. The store expansion was driven primarily by the mass channel and by Whole Earth and the Swerve brands. We continue to see success in our global expansion strategy as well. For the first half of 2022, we gained 8,400 additional doors in aggregate across all of our international markets. Now, shifting to operational matters. While the environment has been unrelenting in its variability, we continue to be fortunate given our ongoing execution of our North American Supply Chain Reinvention project. With respect to our new Alabama facility that services our legacy North American branded CPG business, our second quarter manufacturing was significantly more consistent in terms of total production, which reflects the hard work we have done to stabilize production. We're now producing to demand, customer service, and fill rates are significantly improved, and this is immediately visible in the step-up of our branded CPG segment's constant currency revenue growth of 8.1% versus the 3.3% growth we reported in the first quarter. Beyond the supply chain, we're also combating inflationary forces through a combination of tools, including price, gross-to-net optimization, productivity, and prudent expense management. We're committed to defending our margins, and we will be using this tool to ensure that we continue to deliver on our commitments to the market. We're also focused on maximizing investment in areas of trade promotion effectiveness and reallocating resources to strategic growth areas. For instance, take e-commerce, which today already represents low double digits of our branded CPG sales. Between dot-com and omni-channel, we see a tremendous growth roadmap ahead of us and globally. We have expanded our e-commerce teams to accelerate growth and build channel infrastructure. We have reallocated and optimized resources to ensure we're investing adequately in talent across e-commerce, advertising, and operations, and in capabilities and tools. With respect to our pricing actions, we instituted a mid-single-digit price increase during the first quarter, which, as expected, helped drive revenue growth in our branded CPG portfolio in the second quarter. Cost inflation has not abated, and in some areas has accelerated. As a result, we have taken additional pricing actions that will be effective in the third quarter. While not as large as the earlier price increases, we continue to take action to protect margin dollars. Next, productivity. The SKU rationalization we executed at the beginning of the year, which was a year-over-year headwind of 1.6% in the second quarter, was largely focused on underperforming SKUs and reallocating those resources toward innovation. This is an excellent complement to our pricing strategy and something that we can control in response to external forces. Finally, expense management. The strategy we put in place during first quarter had us well-positioned during the second quarter to deliver our plan, and we feel good about the levers it provides as we look to the second half of the year. We continue to be vigilant about expenses in this environment. We're being smarter about our marketing cadence and are laser-focused on revenue-generative activities such as innovation. Shifting to our flavors and ingredients segment, we continued to generate above-trend revenue growth, achieving 10% at constant currency rates in the second quarter. This growth was driven primarily through volume, along with some pricing actions. This marks the third consecutive quarter of strong growth for the segment following the implementation of new leadership who have developed a set of commercial initiatives aimed at driving adoption of natural, non-GMO, flavor-enhancing licorice-related ingredients in our end markets across food and beverage, cosmetics, healthcare, and industrial. Together with a significantly improved cost structure following our footprint optimization project, we also have an ability to drive more competitive pricing. Taken together, the team has the tool necessary to drive growth, and we're very excited about the results they are generating for the business. Flavors and ingredients is a strong Free Cash Flow generator with high barriers of entry and a global leadership position that will support our broader growth initiatives as we further diversify and grow Holger Franz. This diversification in both revenue and cash flow 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 are 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 our ESG credentials and evolve our brands and products toward becoming a large organic natural plant-based food company. Four, work on enhancing our cash flow management and reducing balance sheet leverage. With that, I will pass the call over to Duane for his financial review. Thank you, Albert, and good morning to everyone. As a reminder, please refer to our non-GAAP reconciliations at the end of the press release for additional detail, and I encourage you to view the supplemental earnings presentation on our investor relations website. For the second quarter ended June 30, 2022, consolidated product revenues grew 5.5% to $133.5 million versus the prior year quarter. On a constant currency basis, product revenue increased 8.5% versus the prior year second quarter. The increase was driven by a combination of increased volume and pricing actions. Reported gross profit was $37.3 million compared to $41.4 million in the prior year second quarter. The decrease was largely driven by cost inflation and costs associated with the Supply Chain Reinvention project, partially offset by pricing actions and a $1.0 million favorable change in non-cash purchase accounting adjustments related to inventory revaluations. Adjusted gross profit of $42.6 million was essentially flat with the prior year period. Reported gross profit margin was 27.9% in the second quarter of 2022 compared to 32.7% in the prior year period. Adjusted gross profit margin was 31.9%, down from 34.0% in the prior year. The majority of this decline was a function of largely offsetting higher cost of goods sold due to cost inflation on a dollar-for-dollar basis through increased prices. This resulted in higher sales to protect year-over-year gross profit, which on a percentage basis lowers gross profit margins. Consolidated operating income was $7.7 million compared to operating income of $6.0 million in the prior year second quarter, and consolidated net income was $1.3 million compared to net income of $3.7 million in the prior year period. Consolidated adjusted EBITDA was $19.7 million compared to $22.0 million in the prior year second quarter. The decrease was primarily due to an unfavorable foreign currency impact of $1.2 million and $0.5 million of higher bonus expense as a portion of the prior year bonus program was settled in stock compared to an all-cash bonus program in the current year. Now shifting to the segment results for Q2. Branded CPG segment product revenues increased $5.0 million or 5.0% to $104.1 million for the second quarter of 2022 compared to $99.1 million for the same period in the prior year. On a constant currency basis, segment product revenues increased 8.1% to the prior year, driven primarily by pricing actions implemented during the quarter. Overall, volume was flat due to the discontinuance of certain private label SKUs at the beginning of the year. Excluding the impact of the SKU rationalization, branded CPG volume increased 1.6% versus the prior year quarter. Operating income for the branded CPG segment was $5.6 million in the second quarter of 2022 compared to operating income of $10.3 million for the same period in the prior year. The decrease was driven by costs associated with the company's Supply Chain Reinvention project, the impact of cost inflation, and an unfavorable impact from a stronger U.S. dollar, partially offset by revenue growth. The company's Supply Chain Reinvention project is expected to improve efficiencies, help offset inflationary pressures, and improve competitiveness in the marketplace over the longer term. Our flavors and ingredients segment product revenues increased 7.4% to $29.4 million for the second quarter of 2022 compared to $27.4 million for the same period in the prior year. On a constant currency basis, segment product revenues increased 9.9%, primarily due to strong volume growth of 6%, driven by growth in licorice extracts and pure derivatives resulting from the company's commercial expansion and innovation efforts. In addition, higher pricing contributed approximately 4% to the overall segment growth. Operating income for the flavors and ingredients segment was $9.0 million in the second quarter of 2022, compared to operating income of $3.7 million in the prior year period, primarily due to revenue growth, improved efficiencies following the footprint optimization initiative completed in the first half of 2021, and a $2.8 million decrease in restructuring and other expenses included in prior results that did not reoccur in 2022. Operating expenses for corporate for the second quarter of 2022 were $6.9 million compared to $8.0 million of operating expenses in the prior year period. The decrease is primarily due to lower M&A transaction and public company readiness costs. Now I will briefly cover our June year-to-date results. As a reminder, we acquired Wholesome on February 5, 2021. I will speak to reported results which include Wholesome for the full first quarter of 2022. Additionally, we will provide some select pro forma results as if we owned Wholesome for the entirety of 2021 year-to-date period to assist in your analysis of the organic growth of the combined portfolio. For the six-month period ended June 30, 2022, consolidated product revenues grew 13.7% on a reported basis to $264.1 million versus the prior year six-month period. On a pro forma basis, organic constant currency product revenue increased 6.7% compared to the prior year. Consolidated operating income was $14.8 million compared to $2.9 million for the prior year period. Consolidated adjusted EBITDA decreased 5.1% to $37.5 million, which included $1.7 million of unfavorable foreign currency. Now I'll move to the cash flow and the balance sheet. Cash flow used by operating activities for year to date as of June was $12.0 million, driven principally by increased inventory levels due to both timing of purchases and a strategic build in certain inventories to improve service levels. Capital expenditures for the six months ended June 30, 2022 were $4.4 million. Free Cash Flow for the first half of 2022 was -$16.4 million. Excluding non-recurring or unusual items, first half 2022 Free Cash Flow was -$8.2 million. We do expect to generate positive free cash flow during the second half of the year and for the year in total. As of June 30, 2022, we had cash and cash equivalents of $27.6 million and $432.3 million of long-term debt, net of unamortized debt issuance costs. During the quarter, we amended our credit agreement to increase the size of our revolving credit facility by $50 million from $75 million to $125 million. Combining available capacity under the revolver along with our cash balance, we ended the quarter with approximately $76 million of total available liquidity. Note that our long-term debt increased from year-end 2021 by approximately $49 million, primarily due to $50 million of draws on the revolving credit facility to fund a portion of the Wholesome earnout payment in the first quarter and to fund increased inventory levels associated with the seasonal nature of the Wholesome business, as well as strategic purchases to protect against price increases and shortages and improve customer service. Reducing balance sheet leverage continues to be a corporate priority. While we seek to reduce leverage this fiscal year, our latest expectation is for our net debt leverage ratio at the end of 2022 to be approximately flat as compared to 2021. In large part due to the strong performance of Wholesome and our need to support that business with higher inventory investment. Now shifting to our full-year outlook. We are reaffirming our 2022 guidance, which includes the full year impact of 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 of 2021. For 2022, we continue to expect consolidated product revenues to be in the range of $530 million-$545 million, with a bias towards the high end of the range given year-to-date performance and planned price actions in the second half. We continue to expect consolidated adjusted EBITDA in the range of $84 million-$87 million, with a bias toward the low end of the range due to our expectation for some ongoing pressure from cost inflation and the stronger U.S. dollar. We continue to expect total capital expenditures will be approximately $10 million. That concludes our prepared remarks. Operator, now back to you. Please open the call for questions and answers. Thank you, Duane. Ladies and gentlemen, at this stage, if you would like to ask a question, please press star and then one now. A confirmation tone will indicate your line is in the question queue. You may press star and then two 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. The first question we have is from Brian Holland from Cowen and Company. Yeah. Thanks. Morning. I guess first question. I didn't see it in the deck this quarter. I know you've spoken to it in prior quarters. There's been some share erosion in the U.S. I'm just curious, any update on the progress that you're making there in the second quarter, and then maybe just more broadly, across your global footprint if the share gains that you have reported in past quarters are still tracking up? Sure. Good morning, Brian. This is Albert. Thank you for the question. Let me maybe start by saying that obviously a lot of the share in North America is linked to our Supply Chain Reinvention. This is why as in our prepared remark, we talked about our servicing of our legacy branded CPG, which is now producing to demand with customer service levels the last four weeks of June at 90% as very positive because that allows us to bring all the products back at retail on the shelf. That will go a long way to the share recovery. I would say that at this point, we have really hit a stabilization point. That's point number one. Point number two, as I have highlighted, you will have in the second half significant innovation coming with the baking season and coming to the shelves. You have a Swerve reinvigoration plan with innovation and new products that we are launching. So all this bodes very well for the second half of the year, which of course, Brian, when you're able to have all the products back, you are also able to promote those products, which we didn't do year-over-year comparison in the first half of the year. So that's with regard to the U.S. One thing that I would point it to you is that our Nielsen measured channel is about 23% of our U.S. mix. As I talked, we're doing very well and growing double digits in food service, in e-commerce, in our club business. When you look at the full picture, what you see, which I think is very important in the current economic cycle, and I continue to talk about the U.S., is really about a very well-balanced portfolio. That portfolio is balanced in terms of, you know, premium brands. As we're going to see with the economic crisis, people starting to spend again more time home, we see opportunities here for home indulgence and personal health. We have at the same time, mainstream brands, which provide accessibility, affordability, and quality, and those are the Equal that you know, the Pure Via in the U.S. and Canderel in international. Finally, I would say a very well-balanced channel split in between e-commerce, food service and retail in North America. In international, we play from strengths. We have significant market share leads everywhere, and we're able to really continue to build our presence and dominance in our international market. The last thing I will say, Brian, in addition to the brand building and the innovation is also the distribution. In the first half of the year, I'm very pleased to report that in North America, we were able to gain 1,700 doors. That's about 3-4% of our total universe in North America. Again, I think that with Supply Chain Reinvention coming upstream and the progress we're making in our Alabama plant, we feel comfortable from a share standpoint in the second half in the U.S., and we will continue to drive leadership in our international markets. Thank you. I appreciate all the color. If I could just shift to gross margin. Please, if you addressed this in your prepared remarks and I missed it, but you know, Q2 gross margins obviously lower than Q4, which I think we were hoping was sort of the trough there. I guess I'm looking at potential drivers here. One, I call it cost inflation. Was there a particular pressure point that moved counter what you were anticipating maybe going into the quarter? Two, was mix a factor at all? Because you know, I'm thinking about that in the context of trade down. I know you called out the strength and carrying some more inventory around there, but I think that generally holds lower margins. I'm just trying to make sure I understand the moving parts on growth margin as we think through the second half of the year. Thank you. Yeah, Brian, this is Duane. Good morning. Appreciate joining the call. From a gross margin perspective, I think it's easiest to think about it from an adjusted perspective, and our adjusted gross profit margin was down around 210 basis points from 34.0% to 31.9%. Almost all of that is explained through the price increases that essentially dollar for dollar offset the cost inflation that we saw. So essentially what you have is the same margin dollars on a higher revenue base. From an inflation perspective, you know, I think we're seeing inflation across the spectrum of our cost structure, whether that's transportation, whether that's raw material costs, whether that's wages, packaging, the like. You know, some are more acute possibly than we had anticipated. I would, you know, maybe point to. It's really incrementally. It's not moving. It's not the one reason for movement. You know, labor continues to be a pressure. Transportation continues to be a pressure as we saw gas prices for the quarter, which were a little bit more than we had thought. That's, you know, as we go forward, one of the reasons that Albert alluded to, another price increase that we've implemented and will be effective this quarter, Q3, to offset some of that. From a mix perspective, there's some goings-in and goings-out. You know, Wholesome continues to perform very well, which from a gross margin perspective is, you know, a little bit of a negative mix. But we see, you know, we're seeing a rebound in North America anyway with Equal and Whole Earth, which is, you know, a bit of an offset. And then as Albert alluded to our international markets, you know, growing very well, which is also good from a gross margin perspective. So some offsetting things, and at the end of the day, mix is kind of muted for the quarter. Appreciate the color, Duane. I'll leave it there. Best of luck, everyone. Thank you, Brian. Thanks, Brian. The next question we have is from Rob Dickerson from Jefferies. Great, thanks so much. I just had a question, maybe for you, Albert, on consumer behavior. I think in some of the prepared remarks you'd mentioned there could, I guess, be some shift in behavior. At the same time in Q2, ex the SKU rationalization piece, the volumes on the CPG side were actually up a little bit, you know, regardless of the pricing. Just trying to get some feel as we get through the year, you know, would seem like there would be some increased elasticity risk on those volumes. At the same time, you're also speaking to the supply chain getting a little bit better just given the North American effort. Just, you know, I guess simplistically, how do you think about that volume trend in the back half given the pricing? I have a follow-up. Good morning, Rob, and thanks for the question. I would say that again, on the net-net, I look at the net positive. This is because you have, as you said, obviously, you need to keep a balance, but I think we have, first of all, very positive health and wellness forces at play. As I've always say, that those are with us for decades to come. The increased focus on personal health, you know, in a huge addressable market is very significant and will continue to play out positively for us. I mean, again, just think about the fact that our household penetration in developed market is about 26% to 77% of sugar, and think about how many people are really taking health seriously, both in our core sweetener, but also adjacencies, which are all the categories where we have ability to play. I see that as a net-net, the macroeconomic cycle is positive for the long term. That being said, you have obviously some pricing elasticity, which we are going to see. I think all of us are learning it and seeing as we go through. What is important, with the pricing we're taking as Duane said, for Q3, what is important is really having a balanced portfolio. I think that what you are seeing if you go back to the previous crisis or economic crisis, what you see is that there is space for premium. When you think about people shifting more at home from restaurants, and there you have indulgence and personal health. We have great brands like Swerve, like Wholesome, playing there. What is important is that we have also a mainstream brands, which is Canderel International, Equal in the U.S., Pure Via in North America, and those are providing affordability. All in all, the best we can do is to balance across our brands, balance across the channels, club, e-commerce, food service, and retail. We feel net-net, we're going to be on a net positive, as we look at the second half. Okay, super. Thank you. Just secondly, SG&A was somewhat benign in the quarter, I guess, relative to history and obviously relative to Q1. Although, you know, gross profit came in a little lower, SG&A is fairly attractive. I'm just curious, you know, is the majority of that coming from this optimization plan within North America? And is that kind of a run rate that we should be thinking about going forward, which offsets some of the incremental inflationary aspects flowing through in the gross profit line? That's it for now. Thanks. Thanks, Rob. You know, I think you're looking at that correctly. I mean, yeah, kind of, I guess kind of benign, although some may have other points of view. You know, as Albert said in the script, we are very vigilant on costs, and we're very much focused on making sure what costs we have is as productive as it possibly can be towards revenue generative efforts. That'll continue to be a focus. We'll, you know, address increases in costs with, for lack of a better way to put it, productivity from an SG&A perspective. I wouldn't say it's necessarily related to optimization, you know, like a formal project that's optimization. It's just our ongoing mantra of making sure that we don't have a bloated cost structure and keeping that as lean as we possibly can. Okay. Got it. Thank you. Thank you. Thank you. The next question we have is from Scott Mushkin from R5 Capital. Hey, guys. Thanks for taking my questions. I kinda had three avenues I want to explore here. One is going back to the US market. I think in the prepared remarks, you talked about the mass channel and that you're gaining traction there. You know, one of the challenges with that channel is sometimes you can get in there, but then you can get, you know, kicked out pretty quickly depending on what's going on with velocities. I was hoping you could give us some granularity on how you're doing there, and is it, you know, the velocities where you think they are, you know, should be or maybe even higher? Just a little granularity there. Yes. Scott, good morning. The simplest way I can answer to you is that we just went through the reviews with Mass, and looking at what has been decided for, you know, the 12 months ahead of us is positive with net gains, which is driving our distribution growth that I talked about. This is coming on the shelves Q3 and is with us. I will talk to the fact that, you know, as one of the things that we have done, Scott, as we were ramping up our Alabama facility for brands like Equal and Whole Earth is what you want to do is to be extremely targeted, right? Even for now, we're very excited to have an average 90% service level. One of the things that we have done is obviously to be very clear on who are our key customers and making sure that we do everything right for them. I will say that, with regard to mass, we're in a good place, that played out. What I did talk about this morning is essentially what's ahead of us. Albert, can I just add something to that? Hi, Scott. Good morning. Hey, Irwin. How you doing? Good, good. I think if you come back and look at the portfolio, you know, with Whole Earth, with, you know, the new products in Equal, with Wholesome and Swerve, the portfolio we have, and, you know, going through, you know, we've been a two-year-old public company, and now as you bring all this together, the distribution opportunities, the white space out there for us is tremendous. You know, we've had to consolidate sales organizations, had to consolidate brands. You know, Swerve did not have the innovation. The team now feels real good about where we are and the products we have. We have supply, we have products, we have them all pulled together. We have, you know, same sales organizations. We have infrastructures in North America, Europe, Middle East. you know, the team is in a good place now to drive that volume and growth and, you know, drive cash flow, drive margins, and reduce debt. That's perfect. Actually, it's a good segue, Irwin, and guys, into my second question around, you know, what's going on with Europe. We had another CPG company which you guys are familiar with, especially Irwin, that had a big, you know, pre-announcement this morning, you know, based on what's going on over in Europe. You guys have a pretty big operation over there, and I noticed, you know, it didn't seem to impact you all that much. The question is it, you know, is the other parts of the business growing faster, the other international parts of the business than expected, and you were facing headwinds there? Then secondarily on the U.S. dollar, were there some surprises there with the strength? Thanks. Scott, I'll just add one thing. Yeah, that's. Maybe- Oh, go, Irwin. Maybe we got people in place that know how to run, you know, just our European business. We do not have the complexity there, you know, in Europe. You know, Albert, who spends a lot of time there, I mean, we got some strong brands in Europe with, you know, again, lots of opportunities to grow, whether it's the Middle East or India or throughout Europe. Yes, you know, higher power costs, higher input costs and where the currency is. But I think where we are in Europe today with, you know, our product line, the demand for our product line, and we've been in Europe a long time, there's still lots of opportunities in the European market, and we've been able to get pricing. Albert, you wanna add to that? No, I think you said it very well, Irwin. Our European business is, I usually call this a fortress. We do have very strong position. We source our manufacturing needs from our plant in Czech, which is best in class. It gets awards after awards, very competitively priced. We just have a fantastic team, very strong position, very strong brands, and essentially we're, you know, nothing is easy today, but I will give big kudos to the team for the fantastic job that they are. In international, outside in developing markets, as I said this morning, of course, we're growing like weeds. You know, we are entering India, as I said, we're entering new geographies, we have added, as I said this morning, you know, just in the first half, 8,500 doors. So what is great and what I just said before to Rob is this continues to give confidence that this health and wellness trends are true around the world, and it's up to us to really rise to the challenge. Irwin, do you want to comment to Duane on the second piece of the Scott question? Yeah. Scott, you had asked about currency. I think generally speaking, Europe has come in as we had anticipated, you know, excluding the currency impact. Currency is a bigger headwind than we were anticipating, certainly at the beginning of the year. That may continue based on what we're seeing in July and going into August. You know, there's areas of Other parts of the business that are making up for that currency piece, and we'll strive to continue to make that particular circumstance happen. The good news is, Scott, Europe is, you know, not a major part of our business today. It's North America where our growth and, you know, what we expect that to come from. I mean, I think that's the good news from a standpoint. You know, we see tremendous opportunities in Europe, and, you know, Albert knows Europe well, so I'm really excited what the team can do there. The big opportunity for us absolutely is North America. Hey, guys. Thanks for the color. I'll yield. I have one more question, but I'll take that offline. Thanks again. Thank you, Scott. Thank you, Scott. Thank you. The next question we have is from Ryan Meyers from Lake Street Capital Markets. Hey, guys. Thanks for taking my question. First one for me, just wondering if you can highlight kind of how you're thinking about new product launches in the second half, maybe as we head into the baking season? Then also what was the sales mix during the quarter from new products? Good morning. On the second piece of your question, you know, we essentially strive to and continue to perform at about 15%-17% of our net sales come from innovation on a three-year CAGR basis. That's essentially the trend we have been on for the last three years. That's best in class in consumer products, and we are investing in R&D and marketing and insights and managing our stage gated to deliver that consistently. We're very happy about that, Mark. That is true for this year. As you look at the second half, I talked earlier to the question about mass and the fact that we have gained distribution this year, and that's obviously driven by innovation. This innovation, what you do have, as you said, is you have a bunch of things playing, and I will focus on the U.S. Number one is you have new ingredients. We talked about the growth of allulose, we talked about the growth of monk fruit, and we're bringing those ingredients across some of our brands, different price points and different benefits. You do have a significant Swerve reinvigoration that is going on as we speak. You will see a lot of those products through our e-commerce and then retail as the months goes by. That is geared to, one, capturing those ingredients that consumers are now excited about and looking for that bake or taste like sugar. Number two, gearing up to the baking season. The last thing I would say, and then happy to follow up in any way, shape, or form you want, is the fact that we are also seeing success increasingly into our adjacencies. If you take the 2 million loyal households of Swerve consumers, they are giving us permissions and looking forward to us expanding into the adjacency. I talked about the chocolate chip cookies, which is no sugar added, which is a very natural space, and we are also seeing good successes in those adjacency areas. Got it. No, that makes sense. Last one for me. When you think about the Supply Chain Reinvention project, you know, what sort of inning of that are you guys in, and when do you think that things are gonna be kind of running at, you know, max capacity or running optimally? Mark, not being a sport expert of baseball in the US, I will let the inning piece to Duane. What I will tell you is that we're happy with the progress we have made. Obviously, taking over the plant, what we saw from the beginning was labor disruption, and we are now stabilizing the workforce. We're happy with where we're at. We have done a lot of training for this. We have put in place a lot of processes, and I would say that you can expect, you know, a little bit more in the months ahead in terms of hitting our stride. We're getting closer to being in a very good place. Duane, any reference to the innings? Yeah, I'd say we're in the seventh inning stretch. For the back half, you're gonna see less dollars going that way than you saw in the first half, and the majority of those dollars will be in the third quarter. There may be some that dribbles into the fourth quarter, but again, I think the inning analogy is probably a nice one, and I'd characterize it as a seventh inning stretch. Great. No, that's super helpful. Thanks, guys. Thanks, Ryan. Thank you. Next question we have is from George Kelly from Roth Capital Partners. Hey, everybody. Thanks for taking my questions. Just a couple for you. The first one, the flavors, ingredients, and ingredients business performed really well again, so that segment's been strong. The question for you is, it seems like since you fixed up the facility or changed facilities, I guess it's the savings expected or the amount that you've realized has exceeded the amount that you talked about going in, I believe. I guess correct me if that's the case, but if that's not the case, but is this 30% operating margin that you just reported, is that a good place to model going forward, or was there anything kind of unique in the quarter that impacted that number? I would say, given the current complement of customers, which isn't necessarily unique, you know, I would think that's a fairly decent way to model it going forward. As it relates to kind of quarter dynamics, you know, the team continues to do a great job in terms of how they set themselves up for success in the prior year, and that coming to fruition in terms of a more diversified portfolio of customers, you know, whether that's confectionery or industrial or otherwise. I think from a margin perspective, we're probably about where we're gonna be. You know, as we get into the back half of the year, obviously comparisons start to get very difficult. You know, we had great growth in the back half last year, particularly in Q4. From a margin rate perspective, nothing unusual really going on in Q2. Okay, excellent. Last question has to do with your commentary in the prepared remarks about leverage expectations at year-end. It seems like you changed the expectation a little bit. I think you said flat year-over-year and on recent calls, I think you were planning for it to decline slightly. Just curious. I'm guessing it's Supply Chain Reinvention cost, but is there any kind of cash flow stuff you can talk about that's different than it was prior? You know, the real thing that we're, as we navigate through this environment of supply chain challenges external to us, you know, there's kind of three things to consider. One is just protecting supply, both in Wholesome and our legacy business in terms of making sure that we can sustain our fill rates, making sure that we're maximizing our quota as it relates to Wholesome. That's one thing. We don't wanna be caught short-handed, and so it's an environment where we want to not be too risky from what we're holding and what we're planning. Obviously, increased costs have an impact on overall inventory balances. Then finally, there's a little bit of timing going on in this quarter, but I do expect some of that to reverse. You know, at the end of the day, inventory levels are going to be a little bit higher than what I anticipated at the beginning of the year. That's strictly to make sure that we can service the customers, making sure that we're protecting our supply, making sure that we're optimizing quota and other things. Okay. Understood. Thank you. Thanks. Sure. Thank you. The last question we have is from Alex Arnold from Odeon Capital. Hey, guys. Two quick ones. One, when you think about the timing of price action or taking price relative to the cost shifts in the backdrop, think about margins coming into this next quarter. Are you a step ahead or keeping pace or a step behind slightly with regard to the timing of the price action? We're not ahead. It would be great to be ahead, but it's hard to react that quickly. That said, I think the team has done a great job of reacting to what we're experiencing. I would say there's, you know, full transparency, probably a step behind, but that's to be expected, but not terribly behind. Kinda Goldilocks, if you will. Gotcha. Okay. The other one is just with regard to the consumer and what's going on in terms of wallet squeeze. Can you sort of characterize the demand shifts across channels as well as the substitution effect that's taking place, kind of net of distribution gains? What are you seeing in terms of channel shift and substitution or trade down? Yeah. Good morning, Alex. Hey, Albert. I would say that what we have seen in the first half is obviously a very nice comeback of food service in general across the world. You know, that's about now back to 20. If you take food service, for example, we're ahead of 2019 now. We're back pre-COVID, and we're doing better than where we were in 2019. That's obviously also driven by the fact that Wholesome and Swerve had small presence or no presence in food service, and we were able to leverage the Power of One, of which I talk often. I would say that is doing well. I would say commerce, as you know, continues to be a great opportunity. This is now, you know, double digits, mid, high double digits, in terms of our e-commerce business, we're 14%-15% of our mix. We continue to invest because we have opportunities there, not only with pure play, but also with e-tailers, as you know. We talked earlier about mass, but, you know, with the Walmart.com or Tesco.com or Woolworths.com in Australia, there is a lot of avenues, and we continue to invest in our organization to continue to build competencies there. I would say that the same on the retail, I think for the first six months of the year, we have seen, you know, growth in e-commerce, growth in food service remains to be seen the second half. How that's going to play out, but I would say that we're well-balanced. In terms of where consumers are going, as I say, in uncertain time, I think the premium is going to work out fine, and I think that the value side, and we have also good presence in private label, as you know. We are extremely well-positioned on our branding and private label business to essentially continue to deliver to the consumer the health journey they are on according to the different price point. I think that is one of our strengths, both in the U.S. as well as in the international. Okay, thanks, guys. Thank you. Ladies and gentlemen, we have reached the end of our question and answer session, and I would like to turn the call back to Albert Manzone for closing remarks. Sir? Yeah. Thank you very much, and thank you, everybody, for joining this. Irwin, please add anything you want, but what I think is important to say is this quarter we executed our plan. I talked a lot about, on this call, about the strengths of the macro trends, the strengths of our portfolio, SCR coming back, the innovation on the back half, the distribution gains, and the Power of One. But one of the things important that I want to really put forward is the team, which has been at this and passionate about this journey for many years. The team knows each other well, and what you want in uncertain time is people that can go from vision to strategy to execution. This is what we have, whether you look in any region with our region heads, which drive fantastic commercial work together with our functions, be the finance, be the supply chain, and we talked a lot about supply chain. I just want to congratulate and salute the team who is doing all and hitting all the strides in what is uncertain time that we have not seen before, and I think they are doing a fantastic job. Irwin, anything you want to add? Okay. Back to you. Oh. Back to you. Albert, can you hear me? Thank you. Yes. Hello? We can hear you. Albert, I echo what you say. I am very proud of what the team has accomplished in its short period of being a public company and dealing with becoming a public company, integrating the four businesses, setting up the infrastructure, building out global brands and for where we are today. Thank you very much for joining our call today. Sorry that I was having some technical problems here. Thank you, sir. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.