LSB Industries, Inc.

Greetings and welcome to the LSB industry's first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce to your host, Fred Bonacore, Vice President of Investor Relations. Thank you, sir. You may begin.

Good morning, everyone. Joining me today are Mark Bierman, our Chief Executive Officer, and Sharon 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 Investors 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 2023 first quarter results and our outlook for the second quarter and full year of 2023. I'd like to start by congratulating our team on their safety performance. As of March 31st, our trailing 12-month total recordable injury rate was below one. Out of all of our corporate goals, our goal zero, that's zero recordable incidents and injuries, is the most important. We're very pleased with the improvement we've had, and I would expect it to continue to drive lower. Looking at our 2023 first quarter summary on page three of the presentation, as anticipated, our financial results were down compared to the 2022 first quarter due to a decline in market prices for nitrogen products relative to the inordinately high pricing levels we benefited from last year. While we can't control pricing trends, We can control the way we operate our facilities and market our products, and we are pleased that through these efforts we generated a solid increase in both production and sales volume compared to last year's first quarter. These investments in our facilities and the ongoing efforts to improve the reliability of our plants are paying dividends. 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 parts of South America and in the U.S., and continued strong global demand. Domestic and worldwide stock-to-use ratios for corn remain at multi-year lows, and we believe that it will continue to take two to three years of good corn growing seasons to bring back the stock-to-use ratios back in line with historical averages. We expect corn prices will stay near current high levels through 2023. This, coupled with lower input costs relative to last year, should make the economics of planting corn very attractive to farmers. We believe that this will translate into an increase in planted acres in the US this spring. The USDA estimates that approximately 88.6 million acres of corn were planted in 2022 and that approximately 92 million acres will be planted this year. An increase of almost 3.5 million in planted corn acres should lead to stronger demand for nitrogen fertilizers, and we are seeing an increase in orders with the planting season getting underway. It is also expected that there will be an increase in wheat acres planted in 2023, further increasing demand for nitrogen fertilizers. Demand for our industrial business is steady. Nitric acid demand is stable as the impacts of high inflation in the U.S. are offset by global producers shifting production from international facilities to the U.S. operations in order to take advantage of lower U.S. input costs. Demand for AN for use in mining applications is strong as a growing infrastructure build has increased demand for quarrying and aggregate production, and the growth in electric vehicles and other applications is increasing demand for metals in the U.S. Pricing for nitrogen products has come down in recent months, largely due to a decline in European natural gas prices, coupled with a slow start to the U.S. fertilizer application season. Pricing has also been impacted by the lower demand for ammonia in industrial applications, particularly Asia, as well as reduced demand for use in phosphate production. However, with China reopening from their COVID lockdown, we should see that trend start to reverse. Even so, Demand trend continues to be solid across our business, and pricing remains at attractive levels. With no turnaround scheduled at our facilities this year and the continued improvement in our operations, we are well positioned for a strong year-over-year increase in production and sales volume. As such, we continue to expect 2023 to be a year of healthy profitability and cash flow. Now I'll turn the call over to Cheryl, who will discuss our Q1 results and our second quarter outlook. Cheryl?