LSB Industries, Inc.

Greetings and welcome to the LSB Industries Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your cell phone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Fred Bonacore, Vice President of Investor Relations. Good morning, everyone.

Joining me today 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 variety of factors could cause the actual results to differ materially. As this call will include references 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 happy to have the opportunity to speak with you today about our 2022 full year and fourth quarter results and our outlook for the first quarter and full year of 2023. 2022 was a pivotal year in our company's history. We delivered record financial results with year-over-year increases in sales and adjusted EBITDA of 62% and 117% respectively. We generated strong cash flow, a significant portion of which we returned to our shareholders through share of purchases, while at the same time substantially improving our balance sheet. Our strong performance reflects the favorable trends in selling prices across all of our products coupled with our ability to operate our facilities reliably and sell all of our production at attractive margins thanks to our strategic commercial efforts. Additionally, we completed major turnarounds at two of our facilities to further improve their safety and reliability. In a major step towards becoming a leader in the emerging clean energy industry, we signed agreements to begin development of low-carbon and no-carbon ammonia projects at two of our facilities. I'd like to thank all of our employees for making this another excellent quarter and for their commitment to developing a culture of excellence at LSB Industries. Our team put in a great deal of hard work and dedication in the years leading up to 2022, which put us in a position to have a successful year. While strong financial results are very important, our primary focus is safety. One of our core values is to protect what matters, where we strive consistently to protect the health and well-being of our employees, contractors, communities in which we operate, and the environment. We've set very high safety standards, policies, and procedures aimed at achieving our goal zero, that zero recordable incidents and injuries. While we have made progress towards this goal in recent years, we still have much work to do to get where we want to be. We expect that investments we've made in our facilities in 2022 and we will make in 2023 will help us make meaningful strides with respect to operating safely in the coming quarters and years. Looking at the 2022 fourth quarter, as summarized on page three of our presentation, we generated strong year-over-year growth aided by a continued favorable pricing environment and solid execution. Notably, we delivered these results despite having had prior turnaround during the early part of the quarter and the impact of freezing weather on our Cherokee and El Dorado facilities in the final week of December. On page four of our presentation, we provide an overview of our end markets. Corn prices remain above multi-year averages, driven by a variety of global factors, including drought conditions in the U.S. and parts of South America, and continued strong global demand. Domestic and worldwide stock-to-use ratios for corn remain at multi-year lows, leading us to believe that it will take two to three years of good corn growing seasons to bring the stock-to-use ratios back in line with historical averages. We expect corn prices will stay near current high levels through 2023, and that farm profitability will remain attractive, pointing to an increase in planted acres this spring versus last year. The USDA estimates that an approximately 89 million acres of corn were planted in 2022, and that approximately 92 to 93 million acres will be planted this year. This supports the view that nitrogen fertilizers will be in strong demand once the planting season gets underway in the coming weeks. It is also expected that there will be an increase in wheat acres planted in 2023, further increasing demand for nitrogen fertilizers. With respect to our industrial products, on the whole, demand remains stable. Domestic end-use markets continue to be stronger than those in Europe and Asia, which is supportive for our business. While inflation and other economic pressures are impacting some parts of the chemical manufacturing industry, mining activity remains strong. and we see that continuing throughout this year. Additionally, recent announcements from automotive manufacturers and suppliers indicate that some degree of improvement in auto production could unfold during 2023, further supporting demand for the nitric acid that we produce. While pricing for nitrogen products has come down in recent months, largely due to a decline in European natural gas prices, demand trends continue to be solid across our business and pricing remains above historical averages. With no turnaround scheduled at our facilities this year, we are well positioned for a strong year-over-year increase in production and sales volume. As such, we expect another year of robust profitability and cash flow. Now I'll turn over the call to Cheryl, who will discuss our Q4 results and outlook. Cheryl?