LSB Industries, Inc.

Good day, ladies and gentlemen, and welcome to this LSB Industries first quarter 2022 earnings conference call. As a reminder, all telephone participants are in a listen-only mode, but after today's prepared remarks, we will conduct a brief Q&A session. As a reminder, today's conference is being recorded. And to get us started with opening remarks and introductions, I am pleased to turn the floor over to Vice President of Investor Relations, Mr. Fred Bonacore.

Thank you, Jim, and good morning, everyone. Joining me today on the call are Mark Bearman, our Chief Executive Officer, and Cheryl McGuire, our Chief Financial Officer. Please note that today's call will include forward-looking statements, and because the statements are based on the company's current intent, expectations, and projections, they are not guarantees of future performance, and a wide variety of factors could cause the actual results to differ materially. As this call will include reference to non-GAAP results, Please see the press release in the investor section of our website, lsbindustries.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. At this time, I'd like to go ahead and turn the call over to Mark.

Thank you, Fred. We're very happy to have the opportunity to speak with you today about our 2022 first quarter results. As you can see on page three of our presentation, it was a great start of the year as we once again delivered a record top and bottom line performance driven by the strong pricing environment of our products that we capitalized on with solid operations and effective sales and marketing efforts. I'd like to thank all of our employees for making this another excellent quarter for their strong commitment to improving and growing our business. There is no question that our results have benefited greatly by the strong pricing environment, a factor that is out of our control. But it has taken a great deal of work on the part of our team to position us to deliver the kind of results we generated in the first quarter and to give us the favorable outlook that we have for the balance of 2022 and beyond. Financial results don't mean much if we're not operating safely. Our primary goal as an organization, day in and day out, is to ensure that all of our employees and contractors return home safely every day. We are committed to providing a safe and healthy workplace for all employees and stakeholders by implementing high safety standards to minimize potential risk to people, communities, assets, and the environment. Our entire team continues to work hard towards our zero incident goal, and we expect to make great progress in this regard over the balance of 2022. On page four, we summarize the key drivers of our agricultural end markets. Commodity prices continue to trade well above year-ago levels. The price of corn, which is a key demand driver for our business, is currently at its highest level since 2012 due to multiple factors. As we discussed last call, ethanol consumption and production has rebounded as US miles driven have recovered from pandemic lockdowns. The EPA's recent waiver of the restriction for use of E15 ethanol through the summer when the product is typically banned for emissions reasons, which will likely lead to even greater demand for corn, providing more support for corn prices. On top of that, global corn supplies remain constricted as a result of strong demands coupled with ongoing drought conditions in the western U.S. and South America and multi-year lows in global corn stocks. Another dynamic that we are watching closely is the wet weather across the U.S. Corn Belt over recent weeks, which has delayed the start of the planting season. At this point, however, we believe that planting activity is likely to be made up in May and June. The important takeaway from all of this is that we believe that our farm profitability will remain robust and we expect that demand for fertilizer will be strong as farmers seek to maximize their yields given current corn prices and the futures that call for corn prices to remain well above historic levels through 2022 and into 2023. We expect this to be the case despite prices for nitrogen products increasing dramatically over the past year. Further contributing to the increase in both corn and fertilizer prices has been the impact of the Russian invasion of Ukraine Ukraine is one of the world's largest exporters of corn, and the current unstable geopolitical situation is expected to disrupt Ukraine's corn production and exports in 2022 and 2023, a concern that appears to be reflected in corn prices. With respect to the impact on fertilizer prices, economic sanctions enacted against Russia, one of the world's largest exporters of ammonia, urea, and ammonium nitrate, have further reduced the global supply of nitrogen products, causing prices to increase from already elevated levels. Finally, the war in Ukraine continues to contribute to high prices of natural gas in Europe, which imports more than 40% of its gas from Russia, making ammonia production even more uneconomical for European ammonia producers. On top of the dynamics already resulting in elevated nitrogen prices entering 2022, Russia's aggression towards Ukraine is likely to have impacts on the global ammonia market far beyond the end of the conflict. On page five, we highlight some of the key end market drivers for our industrial and mining product sales. With respect to the commodity price inflation that I've been discussing, particularly as it relates to natural gas, one of the attractive aspects of our relationships with industrial and mining customers is that our sales tend to be based on contracts that not only give us visibility into future quarters, but in many cases also insulate us from input cost inflation. As you can see on the slide, the demand dynamics for our key industrial and mining end markets remain solid despite disruptions on the industrial side from the widespread supply chain issues in the U.S. Overall, the demand and pricing trends we are currently seeing across all of our product lines have us optimistic about our prospects for strong profitability and cash flow for 2022. Now I'll turn over the call to Cheryl, who will discuss our Q1 results and our second quarter outlook. Cheryl?