Ashland Inc.

Good day. Thank you for standing by and welcome to the Ashland Global Holdings first quarter 2022 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's call is being recorded. If you require any further assistance, please press star 0. I would now like to hand the call over to your first speaker today, Seth Morozik, Ashland Director of Investor Relations. Please go ahead.

Thank you, Josh. Good morning, everyone, and welcome to Ashland's first quarter fiscal year 2022 earnings conference call and webcast. My name is Seth Morozik, Director, Ashland Investor Relations. I hope you enjoyed the video that opened our webcast. As we mentioned during our recent Investor Day, Ashland is increasing the pace of our innovations to drive profitable, sustainable growth. Each quarter, we intend to provide a highlight about one of our new differentiated products or technologies. Our new controlled release grades of Benicel respond to our pharmaceutical customers' needs for specialty ingredients for high-speed tableting, so they can produce more tablets in less time. New grades of Benicel are also used as a binder in response to the rapid growth of plant-based proteins. Joining me on the call today are Guillermo Novo, Ashland's chair and chief executive officer, and Kevin Willis, Senior Vice President and Chief Financial Officer. You'll notice that I referenced Guillermo's title as Chair and Chief Executive Officer instead of Chairman. On January 24, 2022, Ashland's Board of Directors adopted amendments to our bylaws to change Guillermo's title from Chairman of the Board to Chair of the Board to avoid gender-exclusive language as we continue our ESG journey for a more inclusive and diverse company culture. We released preliminary results for the quarter ended December 31st, 2021 at approximately 5 p.m. Eastern time yesterday, February 1st. The news release issued last night was furnished to the SEC in a Form 8-K. During this morning's call, we will reference slides that are currently being webcast on our website, Ashland.com, under the investor relations section. We encourage you to follow along with the webcast during the call. Please turn to slide two. As a reminder during today's call, we will be making forward-looking statements on several matters, including our outlook for fiscal year 2022. These forward-looking statements are subject to risks and uncertainties that could cause future results or events to differ materially from today's projections. We believe any such statements are based on reasonable assumptions but cannot assure that such expectations will be achieved. Please refer to slide two of the presentation for a more complete explanation of those risks and uncertainties and the limits applicable to forward-looking statements. You can also review our most recent Form 10-K under Item 1A for a comprehensive discussion of the risk factors impacting our business. Please also note that we will be referring to certain actual and projected financial metrics of Ashland on an adjusted basis, which are non-GAAP financial measures. We will refer to these measures as adjusted and present them in order to supplement your understanding and assessment of the financial performance of our ongoing business. Non-GAAP measures should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP. The most directly comparable GAAP measures as well as reconciliation of the non-GAAP measures are available on our website in the appendix of today's slide presentation. Please turn to slide three. Guillermo will begin the call this morning with an overview of Ashland's results in the first fiscal quarter. Next, Kevin will provide a more detailed review of the financial results in the quarter. Guillermo will then close with key priorities and steps to advance our strategy as discussed during our investor day in November of last year. He will provide additional commentary related to Ashland innovation and product development progress, sustainability goals, and environmental, social, and governance commitments. Guillermo will also provide his thoughts on important next steps and our financial outlook for fiscal year 2022. We will then open the line for questions. Now, please turn to slide five. And I will turn the call over to Guillermo to begin his opening comments. Guillermo.

Thank you, Seth, and good morning to everyone. Thank you for your interest in Ashland and for your participation this morning. As you will be hearing during the call, Ashland's financial results in the first fiscal quarter were consistent with the earnings update we issued on January 18th. Market demand dynamics in our underlying businesses remained robust. consistent with our commentary in prior earnings calls. Customer order dynamics remain strong across our core end markets, and we're making significant progress on taking appropriate pricing actions across all segments. The teams were able to cover the majority of the forecasted raw material inflation during the quarter through pricing initiatives. However, overall cost inflation, particularly for freight and energy, outpaced our original expectations. An ongoing supply chain challenge linked to the logistics and shipping constraint remained persistent. As we discussed in our recent earnings update, roughly $20 million of confirmed orders were delayed in late December. And we have a large backlog of unconfirmed orders that we're working to fill. Despite these challenges, our team operated at a high level to safely deliver products to customers around the world, yielding the strong financial results you see for the quarter. For all of Ashland, sales in the quarter grew by 9% to $512 million, and adjusted EBITDA grew by 5% to $106 million. Our new preservatives business made a strong contribution to results in the quarter as the team is now fully integrated into our personal care segment. We sustain gross profit margins in the face of significant cost inflation for raw materials, freight, and energy, again driven by disciplined pricing actions. Thus far in fiscal year 22, we have launched a record 11 new products to better serve our life science, personal care, and specialty additives customers with innovative, sustainable solutions. Our plants continue to run very well despite the challenges presented by the pandemic, labor availability, and the energy curtailment mandatory shutdowns of our production facility in China. During the quarter, we generated $26 million of ongoing free cash flow. While below the amount generated in the prior quarter, this is reflective of the impact of higher prices and cost inflation on working capital values, as well as our efforts to rebuild inventories across the globe. I'm very pleased with the progress made by the Ashland team during the quarter and look forward to discussing our outlook for the remainder of the fiscal year later in the call. In the meantime, I will turn over the call to Kevin to review our Q1 results in more detail. Kevin?