Greetings and welcome to the American Vanguard Corporation Fourth Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that this conference is being recorded. I will now turn the call over to our host, Bill Kuser, Director of Investor Relations. Thank you. Please go ahead.

Thank you very much, Diego. Welcome, everyone to American Vanguard's fourth quarter and full-year earnings review for the calendar year 2021. We will have several speakers on today's call, Mr. Eric Wintemute, the Chairman and CEO of American Vanguard; Mr. David Johnson, the company's Chief Financial Officer; Mr. Scott Hendrix, our Senior Vice President for the U.S. Crop Business and the SIMPAS Commercialization; Mr. Jim Thompson, the Director of Business Development, who leads our Green Solutions initiative. Also to assist in answering your questions, Mr. Bob Trogele, the company's Chief Operating Officer. Before beginning, let's take a moment for our usual cautionary reminder. In today's call, the company may discuss forward-looking information. Such information and statements are based on estimates and assumptions by the company's management and are subject to various risks and uncertainties that may cause actual results to differ from management's current expectations. Such factors can include weather conditions, changes in regulatory policy, competitive pressures and various other risks as detailed in the company's SEC reports and filings. All forward-looking statements represent the company's best judgment as of the date of this call and such information will not necessarily be updated by the company. With that said, let me turn the call over to Eric.

Thank you, Bill and good day to everyone. We have a different format for today's call that we believe you will find insightful. I'll begin with some opening remarks, turn it over to David to discuss the financials. And then we want to have two guest talk about our two premier growth initiatives, Jim Thompson will give you an update on our green solutions. And then Scott, who will give you kind of an update or his view of the North American marketplace, which is evolving quite dramatically. And in addition, he will give you an update on our SIMPAS platform. And then I'll come back with some concluding remarks. First, I'd like to talk to you about kind of the cornerstones of American Vanguard from an investor's viewpoint. First, we are a leading solutions provider to targeted niches in the agricultural and non-crop industries. Second, we are poised to benefit from favorable industry fundamentals and tailwinds, which we are currently enjoying at this point. Third, we have broadened our geographical footprint, providing greater market access and cross-selling opportunities. And then on to our two major growth initiatives that we'll discuss in greater detail later in this presentation. First, we have significant embedded value offering, clear upside to our shareholders through the SIMPAS platform. And second, our growing green solutions portfolio offering breakthrough technology. Our sixth point, we have proven innovation capabilities with a compelling new product pipeline to support our long-term growth. And we have displayed powerful M&A and licensing platform with over 20 acquisitions just in the last 10 years. And we have a very highly experienced and diverse management team with an excellent track record. And finally, we have strong earnings momentum with mid-double-digit growth anticipated in this '22 year, which I'll elaborate on shortly. So just…

Thank you, Eric. With regard to our public filing, we plan to file our Form 10-K within the next few days. As we have previously noted, the company is fortunate to participate in industries that are considered part of critical infrastructure in all countries in which we operate. As a result, throughout 2021 and 2020, our customers and suppliers, our employees and operations have all continued to operate more or less without disruption during the pandemic. The 2021 year has been a strong operating performance for the company, with the overall business revenues up by about $100 million or 21% as compared to 2020. Within that improvement in 2021, our U.S. crop business increased by 25% to $264 million and our U.S. non-crop business increased by 30% to $79 million. And finally, our international business grew by 15% to $215 million. All parts of our business are seeing strong demand across the broad range of our product lines and regional distribution businesses. For the full-year 2021, despite some movement by category, gross margin percentage was in line with 2020 at 38%. This underpins the basic stability of the business, as we have managed through significant inflationary pressures throughout the supply chain. Our operating expenses have increased by 18% to end at $182 million. This is on sales up 21%. As a result, operating expenses as compared to sales were 33% in 2021, as compared to 34% in 2020. Our strategic goal is to improve operating leverage of 1% per year. In summary, for 2021, our net sales improved by about $100 million or 21% as compared to 2020. Our gross margin performance has remained flat at 38% of sales, despite significant general inflationary pressures and during the second half of the year, significant inbound logistics challenges. Our operating costs, which…

Thank you, David. I'm going to ask our COO, Bob Trogele, to give you background on our Green Solutions platform and introduce Jim Thompson. So Bob?

Yes. Thank you, Eric. Good afternoon. In 2020, we formally presented our biological strategy to our Board of Directors. One result was in the spring of 2020, we formed a global virtual green solutions team, comprising of the country heads or country technical people and the functions to drive growth in this segment, technology exchange and to focus on the double-digit adjacent space with high margins. In October 2020, we purchased the assets of Agrinos. At that time, Jim Thompson was the CFO and interim CEO and joined American Vanguard and our team worked on integrating two manufacturing plants, eight subsidiaries and 80 employees and the technology into the American Vanguard family. In the spring of 2021, the Green Solutions segment team leader retired. At that point, we appointed Jim to head the Green Solutions team. So it's my pleasure to introduce you, Jim and hand over to you.

Good afternoon. Thanks, Bob, very much. I have a short presentation to go through an overview of our Green Solutions business. We'll be focusing primarily on near-term performance, current and future planned activities, as well as an outlook for this segment going forward. In terms of the latest performance, we're very excited about the segment. As you can see from the numbers, we closed the year out at $40 million in sales through our Green Solution platform. It's an increase of - up from $22 million in the year 2020. Two primary drivers were solid organic growth with the existing offerings that we have and also reflecting the acquisitions of both Agrinos and AgNova which occurred in 2020, you're getting a full year effect of that in 2021. So in total, the growth rate was 82% if you include the acquisitions, but more importantly really the organic growth rate of 39% without the acquisitions is a strong base to build from. Latin America and Brazil represent the strongest growth geographies currently in 2021 for AMVAC. And with respect to Agrinos, as a subset of this number, they generated $9.5 million on that product set, an increase of 19% over the previous year. More importantly, we expect that percent increase to continue to grow over time as really 2021 was a year for preparation for stronger growth in 2022 and beyond. The gross margins of this segment are 46% currently. We expect that to stay static, but we do expect to see higher volumes of the AMVAC produced products and a growing menu of higher-margin third-party products. Important to note that our green solutions portfolios comprised both of AMVAC products and of third-party distribution products. What's - how are we achieving this growth? I'll spend a couple of slides highlighting the…

Thank you, Jim. Okay. We have some remarkable dynamics occurring right now in the ag space. So I thought you'd like to hear from Scott Hendrix, who heads up our U.S. ag team and Canada to give you his insights. Scott's been with us for 12 years now and also was in charge of our application technology, including SIMPAS, which he's going to update you on as well. Scott?

Eric, thank you. Eric had asked me to provide an overview of our U.S. ag sector. So I will do that. I will highlight a number of drivers that are really stimulating our overall ag economy in our U.S. business. I'll talk about what AMVAC is focusing on to drive and facilitate our growth and then talk about our new and exciting technology with SIMPAS. U.S. ag has a rich history of providing the world with the highest quality and safest food globally. It's through our advancement using innovation and keeping the U.S. ag sector on the cutting edge through technology that keeps us on the forefront of productivity within U.S. ag. But before we get to technology and how it is driving our business today, I want to talk a little bit about what the catalyst is for driving and stimulating our U.S. ag sector. It starts with two primary crops and you can look at the other commodity crops within our U.S. business as well, but there is a growing trend. And so what Eric is showing is the chart of soybean futures. If you look over the last 10 years, yesterday hit the high compared to 2013. Eric, please shift to the next slide. The same thing with corn, if you add annually the production of corn and soybeans, it represents around 180 million acres across the United States in production. And those two markets, certainly, understanding the commodity price is the primary driver for gross farm income. That relates to input purchase decisions that allows growers, retail customers to maximize production and yield for their operations. It's our goal to make sure that we understand that and plant. To give some perspective of how the segments within our U.S. business is divided, herbicide by far continue…

Thank you, Scott. And just to clarify, Scott is talking about four crops in the U.S. market only. We have not modeled in Brazil, Australia, Mexico or other geographical regions at this point, but we'll be reporting that in the future to you. Okay. I'd like to just wrap up kind of giving you two viewpoints on our future growth. So in November, we gave you kind of our base business at what we saw at $6.94. We're not changing anything there. Again, we've updated this before and have come up with where we see our green initiatives. And we had reported, as Scott said, 84 back in 84 hitting at 25%, but that's now updated. And so if we pull that together, we are now hitting a peak level of $9.47 revenue by the end of '25. And as committed to you, we will update these graphs as we move forward on a quarterly or as they occur. And finally, just kind of what we're looking at for guidance on our '22 year. Our revenue growth we're projecting somewhere between 8% and 11% increase in revenue, gross profit margins in that 38% to 40% level. Operating expenses, I think David mentioned, we have a target to try to reduce 1% per year as a percent of sales. Sorry, I didn't advance for you. On interest expense, we see that being similar to what we were in '21. But again, it depends on our acquisitions. Right now, we're obviously trending down in debt, but we'll see what kind of acquisitions we have come on board. Tax rate, we're expecting to be somewhere in the mid-20s. Our debt-to-EBITDA ratio, again, we're kind of sticking to less than one without acquisitions and we may - depending on the right acquisitions, press our debt for the right strategics. Okay. And finally, on net income. Yeah, based upon the $0.61 we're reporting, we're seeing an expectation of increase in net income in 60% to 70% where final outcome to be more and what David talked about the 72% - $0.72 a share, that would reflect an increase in earnings of 35% to 45%. So with that, appreciate you guys all listening to this and we'll open it up to any questions you may have. Diego?

Okay. Well, I'll take that that you enjoyed our new format and we've answered all of your questions. So again, we remain available to anybody who would like to have individual discussion coordinated through Bill Kuser. And thank you very much for this update and we look forward to reporting again in the near future or looking in early May, so we're coming up on that soon. So thank you very much, everybody and have a great evening.

Thank you. This concludes today's call. All parties may disconnect. Have a good day.