Good morning and welcome to the MGP Ingredients fourth quarter and year-end 2023 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Mike Houston, Investor Relations. Please go ahead. Thank you. I'm Mike Houston with Lambert Global, MGP's investor relations firm. And joining me today are members of their management team, including David Bratcher, Chief Executive Officer and President, and Brandon Gall, Vice President of Finance and Chief Financial Officer. We will begin the call with management's prepared remarks and then open the call to questions. However, before we begin today's call, it is my responsibility to inform you that this call may involve certain forward-looking statements, such as projections of sales, adjusted EBITDA, adjusted basic earnings per share, gross profit, and effective tax rate, as well as statements on the plans and objectives of the company's business and overall consumer and industry trends. The company's actual results could differ materially from any forward-looking statements made today due to a number of factors, including the risk factors described in the company's most recent annual report filed with the Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statements made during the call. Additionally, this call will contain reference to certain non-GAAP measures, which we believe are useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measures are included in today's earnings release and supplemental information furnished to the SEC under Form 8-K. If anyone does not already have a copy of the press release issued by MGP today, you can access it at the company's website, www.mgpingredients.com. At this time, I would like to turn the call over to MGP's Chief Executive Officer and President, David Bratcher. David? Thank you, Mike, and thanks everyone for joining the call today. I am honored and grateful to serve in the role of CEO and President and truly excited to build on the MGP legacy. On this call, we will begin with our overview of our performance for the quarter and full year ended December 31, 2023. We will provide updates on key financial performance metrics and discuss the progress we have made against our strategy. At the end of the call, we will open the line for Q&A. Our strong financial results for the quarter and year were a direct result of the continued strength of each of our business segments and the dedication of our team who are focused on implementing our business strategy. Consolidated sales for the year increased 7% to $836.5 million, while gross profit increased 20% to $304.7 million, representing 36.4% of sales. Adjusted EBITDA increased 20% to $202.5 million. During the year, we continued to experience healthy demand for new distillate and aged whisky in our distilling solutions segment, which resulted in brown goods sales increasing 39% for the quarter and 26% for the year. These increases were driven by both price and volume. Our brown goods sales growth outpaced U.S. market trends for American whisky in 2023, driven by both our craft and multinational customers. Our strong sales are a direct result of our exceptional American whisky offerings and the relationships we have cultivated across our diverse customer base, which now stands at more than 840 brown goods customers. Over the last two years, we have deliberately grown our new distillate whisky commitments compared to aged whisky sales to bring longer-term financial stability and visibility to our distilling solutions segment of our business. In 2023, new distillate sales exceeded aged whisky sales for the first time since 2020, and we anticipate this will continue into 2024 and beyond as we accommodate our maturing and growing customer base and de-risk our commercial sales efforts. As a reminder, new distillate sales, while at a lower price point than aged, still have a very attractive gross profit margin, are commonly contracted years in advance, providing greater feasibility and providing greater cash flow to be reinvested into our business. As a result of this effort, more than 90% of our new distillate whisky sales volume is committed in 2024 compared to 50% of our aged whisky sales volume committed. I believe customer willingness to contract longer-term on new distillate whisky is a positive sign for the American whisky category sales. We expect total aged whiskey revenues in 2024 to be less than 2023 due to our strategy of developing longer-term stability with new distillate and because of our success in working with longer-term craft customers who started their brands with aged whiskey and are now moving into the new distillate market. While we do have the vast majority of our anticipated total brown goods volume committed for 2024, we expect the last three quarters of 2024 will result in stronger profits as compared to Q1 due to the variation in the timing of customer demand, particularly of aged whiskey, and timing of our Bardstown, Kentucky distillery expansion project coming online. Looking beyond 2024, we are continuing to work closely with our customers to lock in existing capacity through contract renewals and gain additional commitments for our newly created capacity. Turning to white goods and industrial alcohol, last July, we announced the planned closure of the white goods and industrial alcohol distillery in Atchison, Kansas. We're pleased to share that the closure has been completed on schedule. Brandon will speak in more detail about the financial impact of the closure. While it was not a decision that we took lightly given the long history of the distillery in Atchison, we firmly believe these actions will enable us to further align our product categories and their supporting operations toward achieving our long-term strategic objectives. Our strategy to reduce the volumes of our industrial alcohol and white goods produced and sold continued during Q4. As a result, white goods sales for the year decreased by 21%, and the sales of our industrial alcohol products decreased 19% year-over-year. As expected, on a combined basis, these product lines continue to have negative gross margin for the year. Moving to Branded Spirits, our Premium Plus spirit brands grew 50% in the quarter and 24% for the full year, which in turn drove further gross margin expansion across the portfolio. Our focus on investing behind our higher margin brands throughout the year resulted in an increase in full year gross profit to $112.8 million, or 44.4% of segment sales. We plan to continue to focus on margin expansion through our strategy of increasing our points of distribution and shelf presence with our current portfolio of margin accretive brands, as well as through continued evaluation of Branded Spirits acquisition opportunities that we anticipate will further enhance our gross profit as their percentage of sales for the Branded Spirits segment. Speaking of Branded Spirits acquisitions, we're proud of the progress we've made integrating Penelope Bourbon into our sales and marketing platform. We are also pleased to announce that we achieved our goal of having Penelope in 37 states by the end of the year. This illustrates a key component to our Branded Spirits strategy as we remain focused on growing points of distribution by leveraging the expansion of our margin accretive brands portfolio. M&A is a high priority, and we hope to be able to execute more margin accretive Branded Spirits acquisitions in 2024. Turning to Ingredient Solutions, we experienced another strong year. Our Ingredient Solutions segment delivered record results both on a fourth quarter and full year basis, with sales growth of 14% and gross profit growth of 49% for the year. The record sales and gross profit results are driven primarily by higher sales of specialty wheat proteins and specialty wheat starches, as strong demand for our plant-based high protein and lower net carbohydrate foods continues. Before I turn the call over to Brandon, I want to thank our team for their tremendous effort and continued execution. Their ability to build on the momentum we have generated throughout the year and the continued alignment of our product offerings to meet consumer trends enabled us to deliver strong results for the year. This concludes my initial remarks. Let me turn things over to Brandon Gall for a review of the key metrics and numbers. Brandon? Thanks, David. For the fourth quarter 2023, consolidated sales increased 13% to $214.9 million as a result of increased sales in each of our three business segments. Gross profit increased 35% to $85.1 million, representing 39.6% of sales due to improved segment gross profit performance again by all three business segments. For the year, consolidated sales increased 7% to $836.5 million. Gross profit increased 20% to $304.7 million, driven by a double-digit percentage improvement across all three segments. Despite the headwinds we faced in white goods and industrial alcohol, which were largely addressed by the recent closure of the Atchison distillery, total company gross margin increased 400 basis points to 36.4% in 2023. Sales in our Distilling Solutions segment increased 8% in the fourth quarter to $108.9 million, reflecting a 22% increase in sales of premium beverage alcohol. Gross profit increased to $40 million, or 36.7% of segment sales, compared to $31.7 million, or 31.3% of segment sales in the fourth quarter in 2022. For the full year 2023, Distilling Solutions segment sales increased 5% to $450.9 million, reflecting a 14% increase in sales of premium beverage alcohol due to continued strong new distillate and aged American whiskey sales. Gross profit increased to $145 million, or 32.2% of segment sales, compared to $126.3 million, or 29.5% of segment sales in 2022. Sales for the Branded Spirits segment in the fourth quarter increased 19% to $72.6 million. Sales of our Premium Plus price tier brands grew 50%, driven by both the Penelope acquisition and our organic Premium Plus spirits portfolio. Gross profit for the quarter increased to $33.1 million, or 45.6% of segment sales, compared to $24.7 million, or 40.6% of segment sales in the fourth quarter 2022. For the full year, Branded Spirits sales increased 7% to $253.9 million, reflecting continued strength in our portfolio of brands. Sales of our Premium Plus price tier brands grew 24%. Gross profit for the year increased to $112.8 million, or 44.4% of segment sales, compared to $95.5 million, or 40.1% of segment sales in 2022. Turning to Ingredient Solutions in the fourth quarter, sales for this segment increased 15% to $33.4 million. Gross profit for the quarter increased to $12 million, or 36% of segment sales, compared to $6.9 million, or 23.8% of segment sales in the fourth quarter 2022. For the full year, Ingredient Solutions segment sales increased 14% to $131.7 million, driven primarily by higher sales of specialty wheat proteins and specialty wheat starches. Gross profit for the year increased to $47 million, or 35.7% of segment sales, compared to $31.5 million, or 27.2% of segment sales in 2022. We expect 2024 to be another strong year for ingredient solutions, although we expect to see some margin dilution for this segment as we absorb the previous starch stream credit from the Atchison distillery and finalize our plans to convert this stream into a profit center in 2025 with the construction and implementation of a mini fuel plant. More on this in a moment. Advertising and promotion expenses for the fourth quarter increased $1.5 million, or 14%, to $12.3 million as compared to the fourth quarter 2022. This increase reflects our continued effort to prioritize marketing spend on our Premium Plus price tier brands as part of our premiumization strategy. As such, Branded Spirits A&P as a percent of Branded Spirits sales was 15.5% in the quarter. For the full year, advertising and promotion expenses increased $8.5 million, or 29%, to $38.2 million as compared to the full year 2022. In 2024, we will continue to invest in marketing for our Branded Spirits segment to promote our Premium Plus price tier and higher margin brands that we feel have the best opportunity to grow into national brands. Corporate selling general and administrative expenses for the fourth quarter increased $3.2 million to $25.8 million as compared to the fourth quarter 2022. For the full year, corporate SG&A expenses increased $16.8 million as compared to 2022 to $91.4 million, driven primarily by higher personnel expenses and incentive compensation, inclusive of certain incremental share-based compensation costs incurred relating to our CEO transition, and business acquisition expenses related to the Penelope acquisition. During the fourth quarter, the impairment of assets and other one-time expenses relating to the closure of the Atchison distillery totaled $1.1 million. The change in fair value of the contingent consideration relating to the Penelope acquisition for the quarter totaled $2.9 million. This change in fair value differed from the prior quarter due to, among other items, updates to the discount and volatility rates assumed. For the full year, the impairment of assets and other one-time expenses relating to the closure of the Atchison distillery totaled $19.4 million. The change in fair value of the contingent consideration relating to the Penelope acquisition totaled $7.1 million. We'll continue to evaluate this contingent consideration liability in subsequent quarters and adjust as necessary on a quarterly basis throughout the term of the earnout period, which ends in December 2025. Additionally, we believe the vast majority of one-time charges related to the Atchison distillery closure was reflected in our 2023 financial results. However, additional one-time expenses may occur, including those related to the equipment sales in subsequent quarters. Operating income for the fourth quarter increased 45% to $43.1 million. Adjusted operating income increased 70% to $50.4 million. For the full year, operating income decreased slightly to $148.6 million, while adjusted operating income increased 21% to $180.3 million. Our corporate effective tax rate for the fourth quarter was 24%, compared to 19% from the year ago period. The corporate ETR for the full year was 24.4%, compared to 22.3% in 2022. The increase for the quarter and full year corporate effective tax rates was primarily driven by an increase in valuation allowances and lower tax credits. We anticipate our effective tax rate to be in the range of 24.5%-25.5% for 2024. Net income for the fourth quarter increased 38% to $31 million. Adjusted net income for the quarter increased 63% to $36.6 million. Basic earnings per common share for the fourth quarter increased $1.39 per share from $1.02 per share. Adjusted Basic EPS increased to $1.64 per share from $1.02 per share. Factoring in the additional shares associated with the convertible notes issued in November 2021, Fully Diluted EPS increased to $1.39 per share from $1.01 per share. Adjusted Diluted EPS increased to $1.64 per share from $1.01 per share. Net income for the full year decreased 2% to $107.1 million. Adjusted net income increased 20% to $131.1 million. Basic EPS decreased to $4.82 per share from $4.94 per share. Adjusted Basic EPS increased to $5.90 per share from $4.94 per share. On a fully diluted basis, EPS decreased to $4.80 per share from $4.92 per share. Adjusted diluted EPS increased to $5.88 per share from $4.92 per share in the year ago period. Adjusted EBITDA for the quarter increased 60% to $56.2 million. Adjusted EBITDA for the full year was $202.5 million, an increase of 20% from the prior year. The increase was primarily driven, again, by the strong performances of all three business segments. Moving to commodities. Corn, wheat flour, rye, and natural gas represent our largest commodity expenses. Each continued to experience elevated prices throughout the year. Compared to the prior year fourth quarter, our input costs for corn increased 6%. Wheat flour increased 15%. Rye increased 25%, and natural gas increased 36%. Despite these elevated input costs, our risk management process and our focus on products that are premium and more specialty in nature have enabled us to mitigate the impacts of inflation this year in the majority of our product lines. Cash flow from operations was $83.8 million in 2023 and a record $35.2 million in the fourth quarter, reflecting the consistent cash-generating capability of our business. Inclusive in this is our investment in inventory of aging whiskey, which stood at $250.2 million at cost at year end, a net increase of $51.1 million at cost during the year. Matching whiskey put away with growing future distilling solutions and branded spirits demand is one of our priorities and long-term strategies. Strong cash flows for the quarter and year further emphasize the strength of our portfolio and the value of our long-term strategy, even as we pursue emerging opportunities and expansionary projects that support the long-term growth of our company. Our balance sheet remains strong and continues to be available to support investment opportunities that we believe will drive growth and return cash to shareholders. We remain well-capitalized with debt totaling $287.2 million and a cash position of $18.4 million as of December 31st, 2023. Turning to capital expenditures. Our previously announced expansionary projects remain on track on time. Capital expenditures to enhance our operational capabilities resulted in CapEx of $61.1 million in 2023. The vast majority of this investment in the year was for growth projects such as the Proterra facility in Atchison, Kansas, which is coming online in the first quarter of 2024. The Lux Row distillation expansion in Bardstown, Kentucky, which is expected to come online in the second quarter of 2024. Numerous warehouse investments needed to support our customers and our aging whiskey. We anticipate approximately $85.8 million in CapEx for 2024, which will be used for facility improvement and expansion, such as additional warehouses to support our recent capacity increases, dryer investment to support our Lux Row expansion, the acquisition of our previously leased biofuel facility in St. Louis, Missouri, and a mini biofuel plant in Atchison, Kansas, to better monetize the waste starch stream in our Ingredient Solutions segment. Our warehouse investment represents approximately half of our anticipated $85.8 million CapEx for 2024. In recent months, we've experienced some unanticipated land use setbacks in our pursuit of building new warehouses in Kentucky. We continue to work to find a solution, and we will provide additional details regarding our warehouse investment in future earnings calls. In addition to these growth investments, we also continue to invest in facility sustenance projects, as well as environmental, health, and safety projects. Now, an updated look at the financial impact of the Atchison distillery's performance on a preliminary pro forma and unaudited basis for the year ending December 31st, 2023. Excluding the financial impacts of the Atchison distillery, results were as follows. Consolidated sales and Distilling Solutions sales are reduced by $108.5 million. Consolidated gross profit is increased by $4.7 million, and consolidated gross margin is increased by 610 basis points. Last quarter, we shared that we were confident that we'd identified a path to dispose of the waste starch stream via a third party at no cost to the company in fiscal 2024. This is consistent with the detail provided in the updated pro forma financials found in our earnings release. More recently, we've learned that additional operating costs, potentially totaling $4 million-$6 million, will need to be incurred in 2024 to ready the waste starch for commercial sale. These costs involve further drying of the waste starch and expenses associated with depreciation, insurance, energy, and utilities, to name a few. We anticipate a portion of this cost will be recouped via sales of revenue received from our third party partner as a result of the increased commercial viability of the starch. However, trials are still underway, and we cannot guarantee at this point that we will be successful in recouping the incremental costs through offsetting revenue. As such, we are factoring in the incremental costs for our 2024 guidance, but not the offsetting revenue. We continue to pursue other, more economically beneficial options of disposing of the waste starch, such as investing in a mini fuel plant, as previously described. We believe these actions will enable us to further align our product categories and their supporting operations toward achieving our long-term strategic objectives. As we continue to assess current and more creative options to dispose of the waste starch stream and their impact on our financial results, we will provide additional details in future earnings calls. Despite these incremental costs, we continue to believe the closure of the Atchison distillery will be accretive to consolidated gross margin percentage beginning in 2024. It's important to note that in some circumstances, white goods, industrial alcohol, fuel, and at certain times, certain co-products are produced at our Lawrenceburg, Indiana distillery. Please refer to the pro forma schedules included in this morning's earnings release for more information. In accordance with accounting guidance, we expect to present the Atchison distillery operations as discontinued operations later in the year. Due to the impact that the Atchison distillery closure has on our Distilling Solutions segment product offerings, as well as the impact that ongoing changes in the Nielsen price tiers have on our Branded Spirits segment pricing tiers, we are in the process of reviewing our presentation of our product category line items across our business segments. The board authorized a quarterly dividend in the amount of $0.12 per share, which is payable on March 29th, 2024, to stockholders of record as of March 15th. The board continues to view dividends as an important way to share the success of the company with our stockholders. We continue to believe that our focus on organic and acquisitive growth aligns well with our long-term strategy, as well as the underlying consumer trends we believe our business is well-positioned to leverage. We remain deliberate and disciplined as we continue to evaluate M&A opportunities, invest in put away of American whisky, and conduct expansionary projects that are designed to accelerate growth and increase our capabilities and product offerings. As we enter 2024, we will continue to focus efforts on optimizing product mix across all three of our business segments and invest in areas that we expect to generate the greatest long-term value for our shareholders. We expect the consumer fundamentals that have supported historical growth in our business to remain intact in 2024, while we continue to monitor the potential impact of inventory levels of distributors, overall American whisky supply and consumption patterns, and inflation on consumers. Despite these industry headwinds, we feel uniquely positioned to grow as a company in this dynamic operating environment. These factors, in combination with the strength of our underlying business, support the following financial outlook for the fiscal year ending December 31st, 2024. Sales are projected to be in the range of $742 million-$756 million following the closure of the Atchison distillery. Adjusted EBITDA to be in the range of $213 million-$217 million, reflecting a mid to high single-digit growth rate for adjusted EBITDA on top of a record 2023 result. Please note, this range excludes the add-back of share-based compensation expense. Including the add-back of share-based compensation expense, adjusted EBITDA is expected to be in the range of $218 million-$222 million. This range contemplates approximately $5.4 million in share-based compensation expense for 2024. Please refer to this morning's earnings release for previous year's share-based compensation expense. We intend to begin adding back share-based compensation expense when reporting Adjusted EBITDA in the first quarter of 2024. Lastly, adjusted basic earnings per common share are projected to be in the range of $6.12-$6.23 per share, with basic weighted average shares outstanding expected to be approximately 22.3 million at year end. With that backdrop, let me discuss expectations for the first quarter, which have already been factored into the full year of 2024 guidance. We expect quarterly sales and gross profit results for the first quarter of this year to come in below the subsequent three quarters for the balance of 2024. This expectation can be attributed in part to lower relative sales of allocated and single-barrel Premium Plus branded spirits offerings in Q1, timing of customer commitments for brown goods, opening of the Lux Row distillation expansion in Q2, and time needed to commercialize our new Proterra facility, and also some recent international challenges in Ingredient Solutions. Now, let me turn things back over to David for concluding remarks. Thanks, Brandon. We are very pleased with the strong results delivered in 2023. Healthy demand for our products continues, and we believe our business remains well-positioned. We are also happy to report that we completed the construction of our extrusion manufacturing facility within our Ingredient Solutions segment by the end of 2023 as planned. This facility will allow us to support our Proterra brand and offer us additional capabilities that we did not have prior to completion. I would like to thank and congratulate our engineering and operations team for delivering this project on time and on budget. As we move into 2024, our sales team is focused on taking advantage of this added capacity and capability. In closing, I would like to add that despite some reported softening within the Branded Spirits industry when compared to the COVID super cycle, we are very optimistic about the long-term health of this industry. In 2023, spirits growth continued within the total U.S. beverage alcohol market relative to other alcohol categories. And while U.S. premiumization trends slowed broadly in 2023, we are encouraged by the continued growth in the American whisky category, as well as growth in other segments such as tequila. Additionally, recent industry reports indicated inventory destocking at a wholesale level will remain an issue for the Branded Spirits industry in 2024. Working closely with our distributors throughout 2023, we feel we have made significant progress in managing wholesaler inventory for our portfolio and remain focused on driving points of distribution and velocity across our brands with emphasis on our higher margin offerings. Our strategy is to build a portfolio of branded spirits through increasing our points of distribution, accelerating our sales velocity within those points of distribution through effective marketing, expanding our product offerings through innovation, and closing on meaningful margin accretive M&A transactions. We believe the interconnectedness of our Distilling Solutions and Branded Spirits segments supports continued growth and plans to use both segments to transform our company into a dedicated branded spirits company. As we begin the new year, we remain committed to leveraging the strong foundation we have established over the years with the objective of delivering sustainable long-term value for our shareholders. In closing, let me add I am extremely honored to have been offered the opportunity to serve as CEO, President, and board member of MGP starting January 1. I take the obligations that I have to our shareholders, employees, and other stakeholders very seriously. The team and I are committed to the continued long-term growth of our business. That concludes our prepared remarks. Operator, we are ready to begin with the question and answer portion of the call. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Bill Chappell with Truist Securities. Please go ahead. Thanks. Good morning. Morning, Bill. Just wanted to go back on kind of the new distillate sales, and I think one of the things you said was still that total sales would be down in 2024 versus 2023. So if you maybe could get some more color, I think you kind of explained what was some customer changes and stuff like that, but try to understand that. And then also, you had mentioned that you're monitoring the overall American whisky supply levels, and that might be a headwind. So kind of maybe help us understand that. Are you talking about at retail, or are you talking about supply of other players coming for new distillate? Yeah, Bill, I'll start on that. Yeah, thanks for giving us the opportunity to clarify. So we do not expect new distillate sales to decline year over year. In fact, we expect Brown Goods sales in total to continue to grow in line with or better than the broader category of American whiskey in 2024. What we're trying to get across in our prepared remarks is that the proportion of New Distillate sales versus aged sales has been growing, and that has been deliberate, as David mentioned on the call. And the reason for that is, as our customers that traditionally bought aged, as they continue to mature and grow, they're now better able to finance new distillate. And so we're leaning into that because there's a lot of attributes of New Distillate customers that we find attractive, such as the greater visibility they provide and the greater cash flow characteristics of selling New Distillate versus aged brands. As far as moderating the overall supply to the industry, that's not our plan. We're continuing to grow with our portfolio and with our customers. As such, the mix may change more towards new versus aged, but we continue to grow at the same pace or better than the American whisky category has. We've done in recent years. Yeah, I'll add to that too, just in clarification. The new distillate focus is really critical for our business. It gives us longer-term arrangements, financial stability, and visibility for multi-years on average. It's a better business for us in terms of understanding the impact financially on the overall business. It also is somewhat a normal cycle. As the category continues to grow and some of our previous craft customers become bigger, they're naturally going to switch over to new distillate supply. That's just normal. We have no plans to moderate our supply to it. As a matter of fact, we've taken just the opposite approach, as you heard in our cost script, that we're expanding one of our major distilleries in Kentucky, basically doubling its capacity, and we expect it to come online mid-year. So we're very optimistic about brown goods sales and have planned to expand and continue to grow with the segment. Got it. No, that helps. And then if I'm looking at just the aged demand, I understand that you're naturally kind of leaning into the new, but are you hearing from your customers? I mean, now you have 800 customers. Any worries that there's going to be a slowdown in brown good demand three, four years out from now, or is kind of the overall interest pretty much the same as it has been the past few years? I think what we could say on that is that if we look at our aged distillate and we referenced about 50% of it being obligated, that's actually a pretty high number on aged because most of these tend to be craft customers or new entrants into the category. So actually, we feel pretty good about the amount that we have contracted, and how that relates to any potential unknown is that those craft distilleries or craft brand companies are subject to the same inventory retail, wholesale level type of inventory situations as anybody. And so with higher interest rates and everything else, they're being a little more cautious with their investment. In the past, we saw them buy just so they could corner their piece of the business. Now you're starting to see them switch to more just-in-time type of demand. They want to transact, know they can fill the product, and get it right to the shelf given the high interest rates that they operate in. Got it. Last question, just on the aged, I mean, sorry, on the branded portfolio, your comments about there's still some destocking at distributors and stuff like that. Does that mean, I mean, I thought most of the impact you kind of saw in the first half of last year. Do you expect a quarter where we could be flattened down for that overall business excluding Penelope, or is most of the heavy destocking done? Well, the comment in general was about the industry overall. There is still a push on inventory destocking for the industry overall. As it relates specifically to our business, we've worked really hard in the past year to actively manage that with our wholesalers. We believe we have it in a controllable area of data on hand. At the end of the day, the wholesalers do control the inventory. They place the order, and they decide what the number is. I think our exposure on it for us is smaller than, let's say, our peer set because I think we've done a really good job of managing it in 2023. Great. Thanks so much. The next question is from Marc Torrente with Wells Fargo. Please go ahead. Hey, good morning. Thanks for the question. Just building on Bill's question, with new distillate outpacing age going forward, or that's the expectation, we know new distillate carries a strong margin, but age is likely even greater. So maybe anything to read into implications here? And then on the new distillate contract renewals, you mentioned before that the strong pricing there has been giving you cover to be more strategic on the aged side. So maybe any more color on pricing trends there and how long does this, I guess, contract cycle continue? Yeah. Yeah, Mark's exactly right. We have been successful on the new distillate side in getting more and more priced contracts renewed. On the aged side, though, as David said, it's still a very important and valuable part of our business, but we are using this opportunity, as our customers are demanding, to lean more into the new distillate side of things because, as we mentioned, we feel like it sets us up better longer term from that perspective. Yeah, I would add to that too, and I think we call it out in our script. I think this shift to new distillate is a good sign for the industry overall. If people are willing to contract multiple years out, I think that's a signal of their commitment to the category. Yes, new distillate margins for us are a little softer than aged. That's a given, and Brandon has talked about that in the past. But the benefit that we gain from a new distillate is that financial stability, that long-term visibility, and it still has very, very attractive margin portfolios. I look at it as a possible way our effort to de-risk the exposure on age by increasing, as we said in our script, the new distillate category. It brings that stability that we need. Okay, great. And then just a little more color on guidance. Calls for top-line growth of about 2%-4% on a pro forma basis and EBITDA growth around 6%. I guess maybe if you could provide some underlying color on segment buildup and phasing through the year. There's clearly strong growth in your core categories in Q4, but the guide would imply a fair amount of deceleration. Was there any pull forward there? Yeah, no pull forward. To your point, what we're seeing on a pro forma basis is growth in the 2%-4%, which, as you recall, is in line with kind of our long-term aspirations and algorithm. By segment, if we were to take it apart, we expect sales in Distilling Solutions to grow in the mid-single digits, as I said, as Brown Goods continue to grow with or better than the category. Brands, we expect to be flattish to low single digits, which is probably a little counter to what maybe a lot of expectations would have been because while we do have incorporated into our guide strong sales of Premium Plus, again, at or better than the overall category for those price tiers, there is going to be a larger offset to mid and value in 2024. There's two reasons to this, Mark. The first one being mid and value has been on a steady decline, as we all know, as consumers drink less but better. But the second one is we've actually identified 2-4 very large volume mid and value brands in our portfolio, and we've made the decision to either take more price or rationalize, in some cases, the brands altogether because, as a result, it will be more creative both from a gross profit dollar and gross margin%, although it will create an added headwind to revenue for the segment in the year. And then finally, for Ingredient Solutions, sales growth for the year, we expect that to be in the mid-single digits as well. So that's where we get to our revenue guide, and I know there was a lot of a little bit more confusion around that with the Atchison distillery closure, which is why I'm happy to share a little bit more detail than we have in past years. Yeah, and I want to emphasize what Brandon said about the mid and value. We have a substantial portfolio in that area, and for quite some time, to be honest with you, our focus as a company has been always on being marginally creative. Having spent many, many years with the company before MGP, it really was a drive that we were pushing on to focus on Premium Plus categories. And to do that, you have to build that basis of Premium Plus and then strategically relook at mid and value. And Brandon said it exactly right. We have some great products in that that are marginally elusive. And when you're doing that and we're growing our overall business and trying to generate cash flow, we have to pick and choose which ones we're going to focus on to drive the business. And what do you do? Most of the time, the first thing you do is impact it on price. And that is no different than what we experience, and that is why you've seen, and it's in our guidance number, that it's probably impacted it is impacted more than the other price points. The last piece on that, Mark, on EBITDA, we talked about it from a top-line perspective. But yeah, as David said, our midpoint on EBITDA growth is 6%, which, again, is in line with our long-term aspirations of mid to high single-digit EBITDA growth on an adjusted basis. What we also shared in our prepared remarks was that the Ingredient Solutions segment is going to incur $4 million-$6 million in incremental operating costs to ready the starch stream for sale. That is a change from what we knew in Q3. So if you were to add that back or take that away because that is only, in our mind, a temporary cost that we're going to have to incur until we get a longer-term solution in place, that growth is closer to 8%-8.5% on an adjusted basis for EBITDA. So happy to provide that additional color to you. All right. Thanks, guys. The next question is from Gerald Pascarelli with Wedbush Securities. Please go ahead. Great. Thanks very much for the question. Just going back to the guidance, I don't want to belabor the point here, but you have historically started out conservatively. You have consistent beat and raises. And I guess I say that in the backdrop that there is increasing concern around inventory building, etc. Can you maybe just talk about the degree of conservatism that may be embedded in your guidance just to start the initial year and maybe how that compares to years past? I think that'd be helpful. Thank you. Yeah, sure. I'll start and then let Brandon chime in at the end. As we look at our guidance, we want to make sure we're providing as accurate numbers as we know at any given time, all right? So in preparing for those numbers, Brandon and I and our team spent a lot of time, long hours, going through various scenarios, looking at the impact on the starch stream that Brandon just talked about, looking at shifts in inventory levels, looking at shifts in price points, looking at consumer demand. Trust me, when I say Brandon, I spent a lot of hours personally going back through our scenarios. What we provided, we feel, is a realistic number for us for the year. That's why we provided that guidance. If we can always grow our business and do better, we're going to grow our business and do better. But what we provided is what we really feel strongly that we should be able to deliver. Yeah. And to add to that, we shared the exact percentages of new distillate and age commitments for the year to help kind of address this question. While we're still very confident in the American whiskey category, 50% of our age, we still have to go find sales for. And so as the year goes on, we get more confident in that number. We'll factor that in. But on top of that, Gerald, and as I already mentioned, we are still guiding to mid- to high single-digit Adjusted EBITDA growth after coming off multiple years of more than 20% growth. So while we've historically, in retrospect, been conservative, as David said, we feel like this is the right approach to this year as we keep trying to grow from a bigger and bigger base. Yeah, I'd add one last thing in closing off on that question. I mean, it's a given across your hearing now. All of our peers talk about it. There is a reset going on in the industry. We get compared to the COVID super cycle, and those were great years for the industry. But if you start looking at what the industry is doing after 20+ years of solid growth that, yes, it might have slowed a little bit in 2022 versus 2023, it's still a very, very healthy industry. And it's my belief that while we are normalizing, it may be hard as you start to as an overall industry, as you start to compare year-on-year. But I'm confident that it will reset to what we had saw pre-COVID. That's the industry in general. I think there's opportunity for us because of our size and our opportunities, as we mentioned, in pods and velocity compared to our peer set, that we're excited for. And we also factored that optimism into our guidance. Perfect. Thanks for the color. Just one more for me. It's kind of a housekeeping item, but some color on your accounts receivable days. It looks like they continue to increase and be stretched among all-time highs. So can you provide any color on your accounts receivable or if there's anything to glean from that? Thank you. Yeah, good point. Accounts receivable days stood at between 61 and 62 days at the end of the year, which was up about 9 days from Q4 of last year. We look at that kind of in combination, Gerald, with our other cash conversion metrics, one of those being DPO, which also increased from the beginning of the year to help offset some of that impact. But in this high-rate environment, and we shared this one-on-one and on prior calls, customers are looking to extend terms where they can, and especially our smaller craft ones that do have terms. Not a lot of them do. A lot of them are prepay. But they do try to take their commitments as late as they can if they don't need it right away, and then they're paying more slowly. So it is up, to your point. But if you look at our history of bad debt and inability to collect, it's actually pretty good. So we, generally speaking, feel pretty good about it. Perfect. Thanks, guys. Appreciate it. Thank you. The next question is from Ben Klieve with Lake Street Capital Markets. Please go ahead. All right. Thanks for taking my questions. A couple of quick ones for me. First of all, on the guidance for 2024 and the relationship with Penelope, can you comment on the contributions that you have baked into the guidance relative to the metrics that are laid out in your earnout with them? Are you guiding to kind of meeting that earnout, the earnout schedule throughout the year, or are you guiding below or above that? Yeah, we're very pleased with the performance of Penelope. And relative to our underwriting assumptions, it continues to perform in line or better than those expectations. And so as we look at the guide for this year, it too incorporates those expectations that the brand continues to perform as we tack tone for better. Okay, great. Thanks, Brandon. And then one more from me, Brandon. In your prepared remarks, you noted within the ingredient segment some challenges internationally. I'm wondering if you can comment on that qualitatively or quantitatively at all to kind of help us understand how significant this is. Yeah, it's near-term something that we're looking at, but mid to long-term, full confidence in Mike Busch on that team to find a solution. But what I was highlighting in my prepared remarks were really two things. So firstly, we've begun seeing increases in imports of commodity starches from Canada, Australia, and the EU, which is, for now, resulting in some pricing pressure for our own clean-label commodity wheat starches, which represented about 12% of segment sales in 2023. So that's one of the headwinds. The second international headwind is we're also seeing some export headwinds of our specialty protein products into Japan due mostly to unfavorable currency exchange rates. So what we're doing to counter these challenges is really focusing on our domestic commercial efforts to maximize our specialty wheat starch and protein sales here in the US. So we are seeing some early signs of success here, and we're confident it's going to work out over the course of the year, but it will take a little bit of time. Yeah. I'll add to that, we continue to focus on what we do well in our ingredient business, and that is our premium type of products with the specialty products. Those are the things that we focus on. Commodity starch is obviously a piece of our business, but it's really more of a subset of what we do, when really what we want to sell is our specialty type of products. The model we run for ingredients is very similar to the model we run for brand experience. We want to focus on those upside, upper, higher-end margin type of brands. And commodity starch or clean-label commodity starches are exactly that. They're commodity-driven. It works by supply and demand. And yes, this year, as we look at imports and stuff coming in, it's created pricing pressure. Got it. Got it. Nope, that makes sense. Very good. Well, I appreciate you both answering my questions. I'll jump back and go. Excellent. Excuse me. The next question is from Rob Moskow with TD Cowen. Please go ahead. Hi, this is Seamus Cassidy on for Rob Moskow, and thanks for the question. I just wanted to drill a little bit deeper on brown goods volumes. So you mentioned that they were up for the full year, but for the first three quarters, you called out negative brown volumes, which, as you mentioned, was driven by sort of being more selective around the selling of age barrels given better contract visibility on the new side. So there wasn't pull forward, but maybe higher-than-expected spot sales in 4Q that maybe drove the sales beat. If you could just offer any commentary on sort of your outlook for that in 2024 and how we should think about embedding that in Distilling Solutions, mid-single-digit growth, as you called out. Thank you. Yeah. And thanks for the question, Seamus. And yeah, so in 2023, Q4 volumes were a big part of it, of our sales in Q4, especially the growth. And volume did play a role throughout the course of the earlier quarters, although less so than price. And so that was the point where we were making them in a lot of the quarters. As we look to 2024, though, we do expect volume to play a larger role. And a lot of that is because we're moving more towards New Distillate in that type of model. So while we expect to see good pricing at the new distillate and age level continue into this year, 2024, that is, we do expect volume to be the main driver of the sales growth we see in this year. Yeah, I'd add to that too, that the other piece of that is the other distillery coming online, the expansion on capacity. And as we look at our guidance and the numbers we provided, they're Q2 through Q4 focused because of that additional capacity that we'll have available. The other thing I would add in general is our new distillate business, especially as they go into 2024, is really a model of the brand experience category. The people we're selling to are the people that are putting it in their brands and putting it on shelves. And traditionally, in the industry, Q1, on average, tends to be a slower quarter than the other quarters. And as we look at everything that we've talked about there, if you were to subtract our capacity expansions and stuff on the backside, it might look a little more normalized. But when we start to factor in everything going on with a lot of the craft customers, the age that Brandon mentioned, and we look at the back half of this with our margin expansion, our numbers, we anticipate, should be better, as Brandon indicated, in Q2 through 4. That's helpful. Thank you. And then just one more for me. Given that you're moving more towards sort of this new distillate model, and you called out that inflation costs for a lot of your core commodities remain elevated, could you just offer us a little bit more detail on how that sort of flows through, given that a lot more of these volumes will be contracted, and sort of how you connect with your customers on that side? Thank you. Yeah. And that's another advantage of having the longer-term agreements in place because the pricing is input-based. And so in addition to having a typical inflation factor year-over-year, what we also incorporate into our contracts for new distillate is pricing based off of raw material inputs, whether it's corn, whether it's rye, malt, natural gas, the barrel, etc. So there are those mechanisms within our contract to help insulate us in our margins as we go forward in that type of environment. Yeah, it's especially true on the new distillate because, as Brandon alluded, the contracts, when we go out multi-year, they're all based on that. People want to reflect whatever that current grain commodity may be, including the price of barrel. As we look at our aged and our put-away, obviously, those are impacting our future inventory costs and stuff. But in the big picture of things on aged, when the commodities vary like they have, it's not super significant on the overall margin capability because at those points of age, as you guys alluded to, we can reflect that in the pricing as well in the future. The next question is from Mitch Pinheiro with Sturdivant. Please go ahead. Yeah, yeah. Good morning. Just a couple of follow-up questions. One is, if the customers are kind of leaning into the new distillate, how should we interpret that related to their own inventory levels of age? Do they have ample aged and, I mean, at this point? Well, I would say that, yes, I mean, I would think that they're managing their aged and balanced. Our strategy, MGP strategy, for a long time has always been taking a new customer that wants to be an entrant into the branded spirits category in American whisky and bridging them to new distillate. This isn't really a brand new strategy. It's an evolution over time. And so as those customers build those age, they will naturally go to new distillate. They're going to be in a better financial shape to carry the own inventory costs as well. But it doesn't preclude that those same customers get additional sales in their products and need more aged to be able to make that transition to new distillate, which is what happens on a lot of the customers on the aged market. It's also a reflection of why it's easier to contract on the new distillate side because we're doing it with larger customers that have larger brands. And on the aged side, they're able to come in because of our put-away plan and pick and choose what they need when they need it. Okay. And then so when I look at your barreled distillate increasing, it gets us up 26% year-over-year. Some of that's, obviously, Penelope. But I would imagine that as that barreled distillate grows, that growth is really earmarked for your own brands, Lux Row, Remus, Penelope, etc. Is that correct? Yeah, it's both. So to date, it's been more outweighed for Distilling Solutions and not our own brands. But as we go forward, Mitch, that is going to evolve. And part of the benefit of selling more New Distillate with our capacity is the cash flow impact. And so as we move forward, and this year is a good example, that net putaway at cost will be less than the $51 billion we experienced last year. We're going to continue to invest in our putaway to line up with future demand for both of our segments. But that is one of the benefits we'll see this year. Okay. And then just final question. You talk about wholesaler inventory destocking. What have you seen? Have you seen any studies, your own surveys, on consumer pantry destocking? That seems to me to be a significant event. Yeah, no specific surveys to speak of on that. A lot of that, Mitch, as we know, is probably pretty anecdotal. But what we have seen is resilient growth in American whisky despite the broader industry being flattish in 2023. And we expect that to continue. Yeah, I would agree. I think, again, I haven't seen any set data on pantry destocking, to be honest with you. I think that's a speculation. What we can understand is retail emphasis on that. And they've had the same pressure that you've seen at the wholesale level. I mean, they're carrying it at even higher costs than our wholesalers. And when you're dealing with big retailers, they're watching their dollars as well. So I do think that as an industry, that is something that still we're going to continue to see in 2024. But as you look at our own business, it's what I said earlier. It's that compared to our peers, the opportunity to increase our points of distribution is reflective of in our guidance. Okay. All right. Well, very helpful. Thank you very much. The next question is from Sean McGowan with Roth MKM. Please go ahead. Thank you. A couple of questions. So in terms of margin, you've talked about some potential shifts to lower margin segments, etc. But at the same time, if you're stripping out Atchison, the fourth-quarter margins were at extremely high levels. So can you give us some overall color on how you expect gross margins to trend in 2024? Yeah. Thanks for the question, Sean. I'm glad we got to this. I thought we'd get to it earlier, actually. But yeah, so the closure of the Atchison distillery, we anticipate it's going to be very accretive for our overall consolidated gross margin structure. So in the performance that we provided this morning for last year as an example, consolidated margins would be 42.5% in 2023. Going forward this year, we expect margins to be right in there in that low to mid-40% on a consolidated basis. By segment, Distilling Solutions, on a pro forma basis, it's a little bit north of 45%. We expect it to be in that low to mid-40s%. The expansion is not going to be as strong as you might expect, but that's partly due to the Brown Goods sales mix that we've described. Within Branded Spirits, we do anticipate more expansion this year. So we finished the year in the mid-40s%, and we expect to be in the mid- to upper 40s%, potentially in 2024. Ingredients, though, is going to be a little bit more challenged near term. And there's really two main reasons for that. Number one is the additional $4 million-$6 million in costs of drying that start slurry. That's going to temporarily weigh on the segment this year until we get a longer-term solution in place to figure that out. But also, we're ramping up our new Proterra facility commercially, and we're not going to have it sold out in 2024. So there's going to be more overhead to absorb as part of that. So for those two reasons, we actually expect Ingredient Solutions margins to be in the mid-20s for the year. So hopefully, Mitch or I'm sorry, Sean, that answers your question. Yeah, very helpful. One other clarification, and then a quick housekeeping thing. When you talked about the first quarter being lower than the subsequent three quarters, I think that's typically the case. But are you trying to imply that the first quarter could actually be below last year on a pro forma basis? Yes, that is what we're implying. And there's four main reasons to that, and it spans all four segments, some of them we've touched on. One of the bigger ones, in fact, the biggest driver in our look forward is in our Branded Spirits segment, excuse me. And that's really the result of the timing and seasonality of our allocated and single-barrel pick items within our Premium Plus brands. That usually is more weighted toward the back half of the last three quarters. But this year, it's going to be even more so. And those items, as you can imagine, come with a lot of gross profit attached to them. So even on a year-over-year basis, we're going to do less in Q1 than this year than we did last year in Q1. And really, the reason for that is the ideal time to get those products out in the market is in Q3 and Q4. And then last year, when we were getting those products out, we experienced some delays operationally. And so some of them accidentally trickled out in the Q1 of this year. So we're going to be lapping that. Brown Goods commitments are the second one. While we feel really good about having the vast majority of those committed, it's not going to be equal across the year, as David alluded to. And so that's going to be more weighted towards Q2 through Q4. We also mentioned the Lux Row expansion, which is going to take off in Q2 of this year. That's our American whisky distillery in Kentucky. So the new distillate sales we'll get out of that facility will not have a chance in Q1 to take place, but will for the remainder of the year. Then again, for ingredients, I mentioned the commercialization of Proterra. That's going to ramp up as the year goes on. Then as we handle these international headwinds we're seeing, as we already discussed, we expect those to be offset, but not all at once in the first quarter, but as the year plays out as well. Okay. Thank you. Then a quick housekeeping. What do you expect the effective tax rate to be for the year? Yeah, between 24.5% and 25.5% this year. In another note, A&P, advertising promotion for branded spirits, while we're clicking through here, Sean, was about 15-15.5% in Q4. We expect that to be around the same in 2024. The reason for that is, again, flattish to low single-digit sales for branded spirits for the reasons I already described, but really ramping up our advertising and promotion investment into Penelope as the year goes on this year. Okay. Thank you very much. This concludes our question-and-answer session. I would like to turn the conference back over to David Bratcher for any closing remarks. Thank you for your interest in our company and for joining us today for our fourth quarter and full-year 2023 earnings call. We look forward to talking with you again after the first quarter. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.