Whole Earth Brands, Inc.

And I, alongside the board of directors, feel incredibly confident about the future of our business. Significant changes have been made in our organization, and it is clear, as highlighted in our Q1 results. We're gaining momentum in our relentless focus on profitability. Michael has done an excellent job in his first four months, and we're thrilled to announce that Michael has now officially agreed to join the company full-time and remove his interim tag. Our confidence in Michael's leadership is evident, and the changes he is making we fully support. I'm looking forward to his leadership during our next chapter of growth. Additionally, I'm also happy to be joined by Bernardo Fio, who we welcomed to the team after more than seven years of Kraft Heinz. In my early interactions with Bernardo, his energy and passion for the consumer sector is evident, and his dedication to building a great leadership team will be a value added to our leadership team. I'd also like to congratulate Jeff Robinson, President of Masco Worldwide, on his performance, Nigel Willerton, our General Manager now of North America, and Rajneesh Ori, our President and CEO of International, and Rishi Deng, our Chief Commercial Officer of North America. With that, I want to welcome the new team and the exciting times ahead. I would now like to turn the call over to Michael. Thanks, Erwin.

Good morning, everyone, and thank you for taking the time to join the call. I'm honored to officially be in the full-time CEO seat. As I said on our last call, I believe that there are significant opportunities for this business that will create long-term shareholder value, and I am excited to lead the many talented individuals across our global platform. Since I've started, those initial beliefs have only been reaffirmed. I'm grateful for the board's support, and I look forward to updating all of you on our progress. These last few months have comprised of in-depth reviews focused on where we were, where we are, and where we want to go. Aligning strategy and goals cross-functionally is a critical component of ensuring the organization is collectively focused on our critical corporate priorities. The interactions that I've had over the course of several months proved to be immensely valuable, and I continue to be impressed by the depth, quality, and enthusiasm of our team. The leadership changes announced on April 25th, both in structure and personnel, are the product of this engagement and are aimed at simplifying our structure fostering teamwork, and enhancing collaboration at all levels. Streamlining our operations and enhancing cross-functional activities are key corporate priorities as we strive to enhance our productivity and generate sustainable long-term growth. We now have three president and chief operating officers that will lead respectively our North America branded CPG business, our international branded CPG business, and our flavors and ingredients segment. In all three roles, we have promoted from within and focused on giving high performers more responsibility inside our organization. Nigel Willerton has been named Whole Earth Brands' President and COO of Branded CBG North America. You may recall Nigel's name given his founding of Wholesome Sweeteners prior to our acquisition of the business in February 2021. Nigel led Wholesome for nearly two decades as its CEO making it one of the largest organic and fair trade sweetener companies in the United States. Wholesome is our largest business within the branded CPG segment, and we are thrilled to have Nigel here to help us continue driving momentum with that brand, as well as cross-pollinate success factors across our other brands and operations. Complimenting Nigel is Rajnish Ori, who has transitioned into the role of President and COO of our international branded CPG business. Rajnish was formerly VP and managing director of branded CPG IMEA region. He is a seasoned entrepreneur and an accomplished business operator with more than 30 years of experience in the CPG industry across various geographies and cultures. He has demonstrated his ability to drive growth in underdeveloped markets and achieve outstanding results. He's a dynamic leader in our organization, and we are happy to have him lead our broader international team. These leadership changes are important components to helping us manage the CBG business as one strategic unit, which demonstrates our commitment to enhance collaboration, streamline decision-making, and build scale for future growth. This move is consistent with our philosophy of operating as one company, one business, one team. all working towards a cohesive common goal. Looking ahead, as we continue to pursue new opportunities and navigate a rapidly evolving global marketplace, our consolidated approach will enable us to stay agile, innovative, and competitive. I'm excited to be working closely with Nigel and Rajnish to accomplish our goals across our entire branded TPG business. Within our flavors and ingredients segment, We have been fortunate to have a long-term constant in the leadership of Jeff Robinson. Under his leadership, this business has been executing very well, most notably with its track record of double-digit revenue growth for more than a year now. We are looking forward to building on this success and reinvesting in new applications for our ingredients business to continue to further diversify our sales channels. In addition, we are also making a concerted effort to reinvest and support our most valuable asset, our people. One of those initiatives includes implementing an employee stock purchase plan. We want our teams to not only think like an owner, but to have the opportunity to become an owner and share in the equity value creation we hope to achieve. We also recently announced our intention to return back to the office to continue to support and build a unified culture in the organization. Individuals can be productive both at home and in the office, but our top priority is building a strong and collaborative culture, and that requires us being in person together. We have several other exciting initiatives internally that we are looking forward to rolling out to continue to build a culture of excellence, excitement, and energy. I'm also happy to share that our plan to shut down our Alabama manufacturing facility is progressing according to plan. We are in the process of moving our equipment into new, lower cost environments with established co-manufacturers, and those lines should be up and running by the end of the third quarter this year. This will assist us in controlling costs, delivering margin, managing working capital, and ensuring that we are delivering on our commitment with customers. In summary, I am encouraged by the changes we are making and the support it will provide to our global operation. We have an energized team that can make an impact. My job is putting them in a position to succeed. We are pleased with the initial results of these efforts, and we will continue to build on our early successes in the year ahead. Before I pass the call over to our new CFO, Bernardo Ofeo, I also want to welcome Bernardo to our leadership team at Whole Earth Brands. Bernardo joins us at an important inflection point where we look to capitalize on a number of opportunities that lie in front of us. His demonstrated experience, coupled with his hands-on energetic approach, should elevate our team as we embark on the next chapter of growth. With that, Bernardo, over to you.

Thank you, Michael, and good morning to everyone. Before I get into the financial performance, I'd like to express my excitement on joining Whole Earth. Firstly, I believe in the power of the company's mission, which is to enable healthier lifestyles, helping people enjoy life's everyday moments and the celebrations that brings us together. The brand portfolio and geographic reach sets this company to be uniquely positioned to meet these growing consumer needs and drive value in one of the fastest growing categories in the CPG industry. Being in the role for only two weeks, I already see a significant amount of opportunities to reduce costs, especially from a supply chain perspective, and focus on new growth channels, as well as drive more nimble revenue growth management. I believe that my experiences at Kraft Heinz and 3G Capital will build upon the solid foundations that my predecessor, Duane Portwood, and the broader finance and the accounting team have put in place here. My aim is to help the business generate sustainable, long-term value for our stakeholders, and I'm looking forward to sharing more details with you during our upcoming investor conference in the third quarter. With that, Let me walk you through our first quarter financial performance. 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 our supplemental earnings presentation on our investor relations website. For the first quarter, ended March 31st, 2023, consolidated product revenue grew 1.4% to $132.4 million versus prior year quarter. On a constant currency basis, product revenue increased 2.8% versus the prior year first quarter. The growth deceleration as compared to previous quarters is largely attributed to a decline in the wholesale ingredient sales. This was a conscious decision we made to avoid incremental import tariffs that would have jeopardized our profitability. Reported gross profit was $32.3 million compared to $39.6 million in the prior year first quarter. Adjusted gross profit was $39.5 million compared to $42.8 million in the prior year period. The decrease was largely driven by cost inflation, partially offset by pricing actions. Reported gross profit margin was 24.4% in the first quarter of 2023, compared to 30.3% in the prior year period. Adjusted gross profit margin was 29.9%, compared to 32.8% in the prior year. The decline was primarily a function of higher cost of goods sold, due to the cost inflation partially mitigated through increased price. This resulted in higher sales to protect year-over-year gross profit dollars, but on a percentage basis, results in a lower gross profit margin. In addition, the decrease was due to cost inflation above price increases, including increased sugar tariffs as demand for organic sugar continues to be strong. Compared to Q4, adjusted gross profit margin has improved 100 basis points, reversing the trend of consecutive declines in 2022. Consolidated operating income was $3 million compared to operating income of $7.1 million in the prior year first quarter. Consolidated net loss was $19.8 million compared to net income of $2.7 million in prior year period. The net loss was exacerbated by high interest expense and book income tax of over $10 million. We expect cash tax payments between $4 to $5 million net of refunds for the full year in 2023. Finally, consolidated adjusted EBITDA was $16.6 million compared to $17.8 million in the prior year first quarter. The decrease was partially due to an unfavorable foreign currency impact of $0.4 million due to the strengthening of the U.S. dollar.