American Vanguard (AVD) 9 May 232023 Q1 Earnings call transcript

Welcome to the American Vanguard Corporation First Quarter 2023 Financial Results.

I will now turn the call over to Bill Kuser, Director of Investor Relations.

You may begin.

Thank you, Misty, and welcome, everyone, to American Vanguard's First Quarter 2023 Earnings Review.

Our speakers today will be Mr. and American Chairman Mr. the Wintemute, CEO Vanguard; of Eric Mr. Chief David company's Officer; Johnson, the Financial Scott President Senior Hendrix, Vice the U.S. in charge of Canadian our and and initiatives; sales Mr. application technology crop of Solutions Initiative. the Director Jim Business Strategy guiding Green is Development, Thompson, our one Portfolio who and assist available to Mr. answering in Also questions, your Robert Trogele, the Operating Chief company's Officer.

assumptions in company management moment are information. forward-looking Such management's are and statements take Before usual various include disruptions the uncertainties reminder. discuss beginning, reports a risks let's information company's be In expectations. and the current actual pressures, that conditions, may weather cautionary represent on by will estimates subject regulatory in to filings. supply may All and can based Such forward-looking our from and necessarily the results for and today's policy, the call, company's the of of and company. chain differ types to and as information statements best judgment cause competitive call, such not detailed by company's factors other the date SEC changes as this of updated risks

that we With over the to said, call Eric. turn

Thank you, Bill.

has For those the slide, time, York R&D well. We're the majors. employees. for company. traded been do joining of ag are acquire We largely quick model in New to American And a basic Stock as got who on the as Vanguard about XXX us we're Exchange branded our just products founded first We've you 'XX. fully from business integrated

top that in of moment. we'll that, be have about We a growth initiatives talking on X

and X, IMPACT to in IMPACT. in glut glyphosate lower supply the of in on volume have specifically and earnings our of than expected Aztec, of glufosinate the Aztec As large delays U.S. a that and read release, were you from case the sales have on chain in of Slide market the QX we case herbicides, highlighted our China, the due and will

domestic our strong channel balance inventory year. for unusually the the with crop of of sales expect products, However, low we

original In fact, our XXXX income even of with full year XX% the up QX net 'XX to our up adjusted will revenue the up upon XX%. XX% X%, performance, outlook year to with and XX% ranges well forecast, our below to X% EBITDA while improve

move So with There for drivers full were to herbicide. the let's start our QX QX leading are cases, and both and our And insecticide; forward IMPACT, shortfall, main beyond. and year Aztec, our reasons in X leading unique. the

X. Let's several make needed There begin but are materials raw to were issues Aztec, Aztec. with with our

you me through Slide Let walk X.

called European XXXX. produce historically that intermediate is to our would by not they able again been an has made year, be a supplier until DAPRO us First supplier. advised Last that

China, Accordingly, we [demoed] successfully commenced production source which a successfully DAPRO year. last in

Sodium Aztec called HP. DAPRO required another we've is of domestic intermediate upon key make for production a used Historically, producer HP. relied Sodium to

convert the in not However, not engaged they meet DAPRO 'XX time toller Sodium that they new DAPRO demand, us June we would in year. QX informed Aztec to be our this our could the to of end the produce Since supplier into of 'XX, Chinese that HP. produce that until

week in levels was output of issue, HP Sodium begin of domestic commence to producer to April. the 'XX. until series October middle did shutdown production, our begin February their to production COVID, equipment, 'XX, produce Adding however, was did 'XX, until but production not the issues, really did of the Initial due people, optimize to until a and last Steady of December of until not and not 'XX. daily unable March of of

for said, attempted 'XX had we insecticides, demand and in time corn success. suppliers X/X substitute limited only plenty soil the full of season. time for were but a season. XXXX We we result, both other of in of As production able to That Aztec the produce our have to advance lead positioned the

for market year, additional I to and respect Scott? turn the coming QX to with on color Aztec For conditions Scott Hendrix.

Thank you, Eric.

On Aztec approximately pounds. demand million for Slide was will that see forecast X our X, XXXX you

assessed sold challenge, of over it we supply extensive customer had prepare we and that planning analysis inventories. was supply understood our for reported retail. pounds of million distributor point-of-sale by distribution we supply the XXXX data pounds and We historical use the customer critical users possible. at to we and Aztec as grower As data X.X much million we Aztec Through develop X.XX to in ensure for Aztec our as that calculated this position inventory,

equivalent additional Also, we able Aztec. substitution, were production proper for Therefore, a the of product that supply in weekly X.XX provide to updates of season. channel had placement confirm pounds dynamics a to This the growing combination team fluid through as that market. very dynamic Force with approximately X.XX in-season overlay equated scenario was market XXG product geographic able XXXX and daily to and secure and million we commercial to we Aztec of were our XXX,XXX pounds inventory,

that season, compared declined we historical inventory our monitor demand approximately we have to to continued to channel the less XX%. as has As annual than inventory calculate the X% levels of of

in season. As demand in anticipate a preparation for we for result, our growing QX strong the XXXX customers of 'XX

on the this cap had you, it that our Thank profitability. sales off To have is effect subject, noting overall worth Aztec Scott.

a to X, it's $X.XX we million see per a share That $XX EPS Slide can $X.XX. QX largely about revenue over would been equivalent drop estimate have roughly by in you share. that As both the in quarter sales In missing reducing Aztec about and QX. earnings recognized of alone, is from caused of first

better circle a to you Scott, of for let's understanding IMPACT. Now back

for is you see our as capital the market XXXX X, has as low the has stress. historically than Working will supply on and challenge been Slide been have cost the over the been was buying not of inexpensive XXXX. several As Eric chain the under and years running are last a customers' pointed inventory different dynamics important season understand much we out as that behavior. It channel money

early mentioned, glyphosate previously inventories XXXX. to across increased than is $XX the billion billion glufosinate ended the of in protection protection crop $X which market season crop all higher According XXXX. The XXXX segments. in with supply U.S. Eric estimates, surpassed more channel XXXX, and

If you customers and higher significant interest capital inventories prices entering increased ending with outlay rates, increased combine year. inventory had XXXX the in

now Furthermore, channel those by in of fertility customers has as on a devaluing which with QX and and demand along retail levels. large inventories molecules, volume began decrease cash and range products supply impact driving are of reducing sales all 'XX. increase focused flow, our influenced Distribution

XX. Slide to Turning

resistance, retail in drove weeds. existing itself but anticipate will difficult-to-control or focus by We on in are practices with late-season exhausting for they best primarily continue exhibit to IMPACT as Our to weed applications have financial manage inventories lead dictated by a agronomists their nonselective brand mid- needs. and will to our in upside that current combined are herbicides XXXX enabled used trait

this and of inventories continue normal, and performance. challenge full inventories us surplus are a short-term is with positive anticipate customers year IMPACT a herbicides. our in the We and through their performance not nonselective 'XX will work lead brand this puts as season position for IMPACT

have innovation Lastly, and X I to pattern and IMPACT with pipeline continues our across now our highlight customer want We in use family. formulation Furthermore, grow historical continued in expanded soybeans. corn our strategic brands rice bases. our to that have innovation RAM

power ProLease solution, herbicide latest The our launched out to we of and ProLease technology. of weed stability, are control [Indiscernible] that fact, our date, almost contains that brand. optimizes we In sold and

Thank you, Scott.

together, accounted million of $XX unprecedented IMPACT less had conditions, than have not Thus, EPS $X.XX a As been first QX our was these the per not sales have another were X for reported. in earnings see $X.XX from effect taken IMPACT about would This in quarter the plus can that have quarterly on you EPS QX per In 'XX, had $X.XX Slide share, of $X.XX 'XX. XX, alone during those share. short, we the we share. shortfall Aztec would

At year. about will update David? initiatives this to few a David our give talk me return to make on let further and an the point, balance I and ask growth of the then comments, to

regard With file Form public you, Thank plan our we later XX-Q filing, Eric. to today. our to

quarter overall XXXX On with has Slide XX% outlined. same the $XX or the million first for challenging note performance has reasons that the operating to for about will of the of period down company, XX, compared XXXX a already revenues as you seen Eric

for sales business non-crop business in main usual quarter-over-quarter other increases the our drivers more with in performed X% The international for business. manner and a our of X%

to Moving XX. Slide

the think more are is we As closely manner that time that we results peers. in we parallels presenting last of first this our the the market quarter at a call, indicated our

results expenses no to rather in operating closely has cost impact costs, gross net freight have which are margin than as substantially expenses. This equal a operating and net our change sales outbound percentage operating or We of variable with It reduction sales. income. income logistics sales of percentage of performance both moved an on and tracked and

first of U.S. our Aztec of the at primarily are to ended overall and we result is by recovery net in on which the lower as approach XX% -- XXXX, performance manufacture margin overhead by reduced some material a reduced as our under factory the of in see the by margin best and products, driven inability percentage XX, our of The crop XX% gross For logistics, volumes to for reduction Slide planned sales driven accounting freight of our new shortages. that quarter gross gross sales performance, compared you XXXX. margin

As these sales performance. our crop significant a U.S. impact products gross remarks, Eric had of his in on detailed and missing opening margin direct

on to Typically, you without sales. can with regarding the outbound X% operations, operating associated my costs X% to to amount those presented remarks presentation Further XX, are of statement logistics. see of Slide about costs our of our new here expenses

with compensation For and X% same the from our a exchange lower of administrative positive was incentive reduced the expenses by of some performance ended XX, driven March the costs benefit This of months lower global short-term movements across XXXX. financial XXXX, associated the period business. X result by rate as operating

to offset, fees of all outstanding pay resolving the matters. proxy agreed something an As capitals, contest cruise Board

and Slide year. ended on driven lower Operating expenses at the by were declined for summary, short-term in prior versus by net X%, XX% sales In mainly XX, XX% reduced profit our XX% incentive by gross compensation. accruals

shares million we level the last of stock million same at performance this management ended year, last repurchase and cash approximately the about during the was with debt XX $XX.X company's as Our good, X.X notwithstanding spending to months. time

up by which to as period more same than the Interest averaged significantly, X.X% primarily year, a prior the compared the driven of for interest rates, increase. quarter during expense X.X% is X.X-fold

continue to balancing activity, follow overhead forecast inventory a recovery including to level. planning factory with and our demand disciplined We approach

XXXX. in that you $XXX On end at to our same inventory XXXX, of Slide quarter $XXX million the graph first compared XX, the at can the the on point to increased as see of million

driven increased second are increase strong including a impact sales materials Aztec, comparatively across to related in growth at business, inventories the our that necessary have This to need we looking by customer half forecast, meet few inventories of was that manufacture generally factors, higher XXXX. an raw based to of And on higher of inventories we demand. and expectation

on last point repurchasing in remained XXXX. graph stock XX to at The the compared end ended of fact quarter shows $XX.X as the the at Slide the $XX Essentially, that XXXX debt at spent million despite million same $XX XX million we've flat the of over that months. debt company's first the

XX. to Slide Moving

relatively XXXX, company's first Debt X.X% remained value shares about and annual flat outstanding is for During period. share normal we the remained the of the cycle flat repurchases quarter some December. by during produced which slightly. The increased of start a and, at cash result, increased, share Enterprise the during period. have have as price made additional the

EBITDA company's March low, from adjusted remains bank X.XXx reflecting increased to annual at but cycle. Finally, XXXX, XX, leverage the at X.XXx XXXX, the December XX,

With Eric. back will that, hand to I

our Thank 'XX color will This targets. turn X our us core and drivers: major important heard review other Scott's performance full business the let me you, SIMPAS on and next a year 'XX to give of David. elements Solutions. Having Green for business, foundation

on it turn back SIMPAS, update Scott. an For to I

Thanks, Eric.

SIMPAS the X units liquid several includes targeted our applied SIMPAS platform grower hardware and by enable launched will how measure Our technology deliver to the SIMPAS our focus to the experience. and that is much equipment. and liquid software with technology, is to be has to will prescriptively by equipped continue within We sensors. for material monitor which Phase upgrades XXXX introducing innovate This technology

all communicates Further, to by have tracing enhanced SIMPAS a that we platform. capability installing our modem our points data dedicated Ultimus

these advancements liquid. it's will are what Taken record applying to enable and users together, and where when, they measure, granule verify or whether

acres We're treat on have SIMPAS based approximately estimating We been have sold XXX,XXX domestically. that systems this new defined. will the XX prescriptions that

million total Our domestic date. unchanged SIMPAS is $XX outlook to at revenue

for drivers key Slide the XX identifies SIMPAS commercialization. financial

Our XXXX, SIMPAS have while approximately technology technology use Xx XXX has acres used grown per average SOLO almost treated SIMPAS growth that now revenue treat XX%. our annually. being acre domestically with We XXX,XXX grew since systems

we To that are the team ag biggest adding and marketing and those a this technology. we're meeting alliances digital the upon them with forge identify call to embrace with currently same regulatory call believe to to we that players authorities dedicated of end, retail sales in to and growers USDA's companies time, this distribution, precision At apprised capabilities the for of technology answers agriculture. keep to

broader this as are over X well. years having million markets focusing technology, past After spent developing about the on $XX we attaining now

is the ag In fact, sell XX in to world. XX to which we Brazil, the largest producer in plan units

back it to turn I that, Eric. With

XX Scott. And September season. the is 'XX say you, systems to XX for Thank that I'd

So come it's still yet. to

Solutions. to turn business, have Thompson. Green To let's we'll cover that our Next, Jim

So Jim?

you, Eric. Thank

wanted performance key to move highlight Slide we As and XX, achievements QX indicators to of commercial for we the financial XXXX.

of line revenues million, as terms QX of in estimates growth compared XX%. and our financial $XX.X QX, with of we Solutions Green was increase of to performance which an XX% In generated our XXXX for

Latin With our being of our performance quarters year. product XXXX, sales to strong throughout for can a was with and generally the QX led strong for the the biologicals by of selling Bsure million by in reaffirm strong QX highest and start U.S. Solutions year team growth year, we organic in market. fiscal Green the QX $XX The American our guidance

the for brands commercial front, new our lubricant BioWake and seed channel its the and BioWake platform launched into AMVAC the this On U.S. view And We corn successfully market as soybean in for we incremental product will line and partners. expand market. crops an we the future. value-add

segment. the Symbiotics products the both strengthens NewLeaf in AMGUARD new in United and NewLeaf relationship between the supply executed collaborate team This quarter, a first AMVAC's also will Our agreement where parties with non-crop new launch to in AMVAC further States.

first of end made Biosystems also sales products the from AMGUARD quarter, team recognized at first acquisition stemmed the the American of Our which XXXX. the in

of XXXX. to Agrinos received of products international increased regulatory acquired Latin from segment greenhouse in We our proprietary continue for Green Solutions our in opens our our markets. approval American grow Rica, via which sales the Costa We team for the family products door in

a potential markets and or companies, have development Green portfolio. working business the Lastly, at potential M&A for companies with all new to all opportunities growth The more the pace. which business. on intense recent is M&A bolstering the green seek of incremental capital changes focus landscape with in caused growth continues feverish partnerships AMVAC larger evaluate Solutions an events solutions our to increased in accelerated transactions, financing diligently

of acres million tell corn the for BioWake of a Slide in about On that our view good to wanted market in we with little window and QX. accelerated opportunity. happy showed we XX, line, BioWake in the sales We treatable first excess as a the launch is and space. XXX U.S. QX more alone. seed the sales large, the BioWake on soybean very lubricant pace the in in We're market progress bit product our the and given QX, fact opportunity in launched and strong

broad other expanding additional expansion wheat bioinsecticides include product bioherbicides, pipeline such We BioWake a products focuses crop line and to acre and peanuts, cotton, into product the micronutrients. also while as that on developed crops, biological

bushels acre providing bushels BioWake of investment attractive per return on acre is growers. on our and corn, increases showing a for soybean per yield X.X for very X.X

will to of BioWake move the it our felt demonstrates our for the We a show ease product we work. clip very we shortly. farmers. to use wanted video at short products would video you system As of for that XX, valuable be Slide to new see follow The

[Presentation]

come in products growth XX targeting portfolio Slide and business. organic key our the to our as existing the that are bulk from market lastly, we our the we guidance continue XXXX Solutions And growth strong shows acquisitions. will continued integrate in of Green The of from

business BioWake and geographic AMVAC's new XXXX revenue in market to expansion and in XXXX, our partnerships, products Bioproducts. addition, be In transactions. for incremental adding growth all International areas as American the strong and a of driver we expect to by new In we're M&A such generate continues geographic XXXX.

At can this targets. you, we point, Jim. Thank XXXX to turn performance our

As you graph. can our see been upward QX the of middle moderated trajectory on revised Slide XX, in the performance, with our has

'XX. the 'XX curve our midterm other for upward unchanged and words, the remain However, we years targets. is on otherwise to track In meet

outlook. still 'XX. is you in net 'XX XX% 'XX; X% year; following: line XXXX that XX%, an is margins targeting of net to topic between Slide similar would the which 'XX; year as will XX% sale XX% XX% to are which income of is would 'XX $XX operating X% EBITDA XX, important of expenses $XX range, which to can as of in full from that XX% performance last QX, and to million, a final see adjusted $XXX million, Our lower-than-expected and to $XXX Even our improvement million gross XX% that million $XX factoring exceed after to over $XX XX%; the be million, with sales between expecting to in between are representing we and improvement million above profit be percent which

balance closing, strong 'XX. In see performance first of a I for following quarter the setback,

of growth portfolio we adoption and core short further the to both Green in the focused SIMPAS, conditions of drive and business, profitability trend and gaining Solutions the on our midterm. our Given line approach for positioned are

Misty? that, questions to may to the over turn it operator any have. I'll you With take

Capital. question a have from Chris we like from looks It Loop Instructions] [Operator Kapsch

focus Or also curious having soil I'm margin business? see, if $X.XX not from mix the fully of the that was mix rest on the is $X.XX exclusively think the had orders variances questions. attributable maybe the impact on and, in for affecting that have that therefore, inputs have an and factory the is couple to -- of absorption and, gross for delivered? insecticides. on, I sales you the Or revenues there getting just adverse the you sales? the so therefore, attributable let's let's would a to and Look, quarter, Aztec

actually, sales. beginning Again, over quarter. else XX% down once That $X.XX at X-week performance. shut do a we've is first a to manufacturing, But fact, And even probably factory factory can't about There's during the than turnaround. we're less we're the we quarter, in got and that. running of capacity because or the that X-week something

So had was a well unit basically that's we running capacity. that at the plant below Aztec. particular And

that's have main We there, our unit. other but units

Okay. I as half acreage. corn were -- obviously, plantings quarter to end quarter, -- this able up I is of in maybe from is the But as the lost recoup the progressing? the USDA, XX% in just you And are of channel. But to understand think planting of yesterday that, were X% able not quarter, just second normally the deliver then sales so question you to first the it's the April, the is, corn you to are of so any end

Yes. We third did some and of April, on down But the done we probably in second about -- have than quarter -- more really first formulation. April third did Scott? by maybe -- end we've We the of tech, produce, and April. I April quarter. kind channel Scott, between we think, week got of the the XX this XX. And and basically, shut additional that do that to somewhere but we continue in did sell in were

the And understanding time, of product for confirm planting going producers. we middle logistics an Yes, point, end at of be window made April, close getting decision was And the for to it were is Eric. market. the to there get the that optimum I customers would market. a to as to that that, late to There's most too the

on IMPACT. -- then you. on And Got the sorry, the

-- thought those the downward to molecules, I this demand sort pricing spectrum a is purpose issue, counterintuitive areas surplus extent extent product where of resistance not so pressure more glyphosate that side, on but don't So little like that -- of workhorse available broad and okay those. I those glufosinate. post-emergent that I a of especially the to availability the obviously complements it's get some of more thought for of there's are those I chain. that normalization would just the But that that herbicides was was given in an those to be the complement those. would supply But your have one

can that reconcile just you So difference?

one of management. glufosinate -- -- saw the good I Bob. both was both at mean, Scott alluded each of to carried we Scott on dealers But they but units I'll that distributors are charge glyphosate And and and take so first over. that, what or and for sitting their cash quantities them,

on. from standpoint, and to a inventory, is season totally point, of 'XX -- were just accomplished then we're then for And in upside can down everything that, their okay, they're is. which we've saw where we this some where look going they buying move get unlike the people later. At we'll so we'll buying the hands market through once what cost terms to then our versus And of saying,

Scott, So to color add that. on any want might you maybe

able nonselective for was them. being supply a enabled outstanding. Eric, position that the 'XX late the Most large substitute was which middle primarily and second to half X came of impact to upon glyphosate Yes, of half try commentary for second we've molecules in in too it. lot the in build -- were season. last We trade year, I'll performance were referenced glufosinate the of our the of to that

had of still seek have took by of prepared just Impact the management lot in to today a going the in for weed advantage XXXX, a practices of that we We upside So best from increase place. the because is 'XX. that of complementary we was the 'XX as the in resistance both and rates is that's preparing or opportunity want we same market of surplus to both glyphosate very take molecules. market those glufosinate to in

in we've now the a that and to of products soybeans brand in too, other what overall we've with X combination the we see our building got as [Indiscernible]. herbicide brand, got portfolio addition But and

weak really us a out spot we portfolio. back ago nice since than other then, for IMPACT. was built years a So or X maybe And were we've X herbicides

So...

is jump -- last in Well, down just so to pressure pricing this But provided extent is on was and is of Roundup sort for normalization challenged your herbicide way let your the suppliers major one back that -- that can this of given there upward subject, I so for queue. particular, on pricing, with me those as on other the the of of the supply then pricing impact for products. lift for and -- or pressure in prices that that umbrella Is to these other the their herbicides, is sales chain IMPACT normalization herbicides? an creating

first take go . can one, ahead. You

most help Yes, with control I'd weeds of delivers proprietary good the some to you, What in nature today. nature the really what share the question. of the of and really it marketplace complementary difficult impact

waterhemp, that's So glufosinate are amaranth, or those molecules Palmer or resistant low. meaning the is or glyphosate ragweed, very performance either resistance,

control IMPACT in So helping manage and to difficult complementary is those weeds.

is proposition different or value glufosinate. than the So completely glyphosate

with we so about dynamics pricing despite position pricing good current what's molecules. other the on And our feel happening

Our from from come going ROTH Gerry next to question is Capital. Sweeney

it, issue. had of your question December the is, chain you It though a or year. the does this supply right, like into necessarily year, gist a it Aztec, was track can time sounded the step really like this then in change started, through supply actually you to wanted so or chain view we how I take manage it And don't back. this have future? it issues how with sort start sounds Aztec, developed So and long of This last with lead

Yes.

through So And again, huge our phosphorus China COVID so shut challenge monumental us. sales in and no to on were hit, going sourced, were we at way that material dramatically really export down, to not we clear way. supply on people able majeure, we But chain. where miss a force we when our And those steer strain that put phosphorus. had focus when Pakistan shifted and in looked was longer any we areas a

we pushed of hit was that did June 'XX hit back -- our at one and set -- engaged when we're our a stream. as it said, okay, have They what September, with just to we domestic had the supplier Sodium with This to to HP, thought come and we did DAPRO And it we also moving we domestic. DAPRO, be that, good manufacture. did Sodium up DAPRO job kind one issues, product it was to got a us. was that, source manufacturing, and somebody this towards convert we They We but we into went felt on going campaign. And of HP. started the to -- Chinese our supplier going of

very the fourth million sure we'd available product have was, X point, were through So challenges we even which to strong. would though some for needed quarter, demand, we pretty quarter we at have again, all we knew some we the demand meet were be, making very, going to first figured we pounds,

the coupled product They per to whole had in down going X,XXX the before. initially kilos through, things this had But day. series kind just we've had There the new made be As to And quite we kind kilos around producer Year's, New it that day. for produce that kept they China a shutdowns. at had got COVID it start-up never of shutdown And with they problems a manufacturing got the Chinese park was they to industrial while, forward. part. for a X,XXX expected of were of just whole a able with

we X were could days, get. everything We that freighting air every

to fourth March. be going was December who then pushed producer in U.S. into Our got

seeing kept it week, just we each so And tougher tougher. getting and

as think Overall, we said, Aztec. manufacturers previously, fourth we sure before, the make we'll going to being get into needs advance did of to sure would material X with do in we next have that the part of make we latter didn't 'XX I 'XX, that got -- into of our squeezed. about we positioning campaign quarter going have talked I we plenty when construct say, So into with

it's So our We is we use look manufacture it access the where molecule we those up the at considerably inventory, intermediates. packaging, see raw made quarter facility. things year. word -- first you labels, other A another half over you at number the was to materials the of of if Aztec of for campaign didn't last gone are all

something So I doesn't for think I until advance see will far future, the changing, bringing materials to that make we foreseeable guess sure as again. as in this happen be we different,

not products products, a taking necessarily, even give then I a maybe Aztec, couple reviewed understand have of of sole up set producers other a mean, -- I of that are outside sort larger So right? points of intermediary from you further, are ingredients a ingredients maybe right, to that are that sort up that key and of of And sourced the different going step what's intermediate revenue of or couple producers. different any there couple of mean, on sort or you but Have to out perspective? go you supply margin, chain are

path out we've that. that And well supply basically path for we've we're pretty chartered that every last on, and we're sole-sourced complete has source. the on And chain, X.X have. years, we on product through dual the the to Yes, our and doing gone been

U.S. well. for process to herbicide outside that one have that improve the source but U.S., getting for second we're have we're source use as that to EPA able a we in We the of

that China also of lost up Malaysia. supplier but We've after had that source out sole-sourced got in our with the shut Bromacil down, have we was backed herbicide our we

if would not that cost well is blended we sole-sourced yes, do that pretty on producer, that, -- being said, X do higher that. potentially focused keep suppliers on point, we're one be to again. have going than that a a product So to to And we're your we alive, we

able we've increases been And far, those our program. so pricing to factor into

So...

What this with sort the would your follow-up And be extensively reduced with flow to conversion? QX Got helpful. it. appreciate sort a That's I to you potential that. flow -- cash of would year? changes EBITDA from would the that cash free of maybe of schedule Or sort your free this miss? of projection what do have flow then cash investment year from the any be

David?

-- down bit quarter, this annual EBITDA or our given profile working the forecasted quarters first capital anticipate see we behind difference the is XXXX in X range flow any have time. a our come a from at I start quarters expand We but cycle are perspective, little to in for the then our to for end. the And at don't in and first cash

it. Got Okay.

Sorry, go ahead. .

investments. I yes, mean don't think we're planning And not strategy to regard sorts time. different our we're any things I to there's change of change at all in the that. looking all with

next Wayne with come Q to is question going Our - from Gabelli. Pinsent

have questions a the to got QX online been Aztec guys supply was issue just my well reported thought the But guys Most mentioned when pretty you on back expand that, resolved prior, I had answered. guys when getting little of know of that you I sales But from with you first half. then late the lot season a QX you through you in mentioned April. that March. selling into the those going anticipating were missed

-- weeks, we make you just And in you what to do there sales? it like through late those able then QX just mentioned some walk into of QX, came it be is to that recovered? little a think was QX -- the $X.XX shifted cadence and just few that you might miss on going see those too if into it Just percentage

includes higher about what on QX talking little we sell think numbers equivalent. we million, which million I as sales, of of So pounds and million reflected Aztec and QX X.X we million, than what Scott's quarter year-over-year, $X.XX, in take in of the actually in we 'XX. about -- higher X that yes, if think I QX. the did QX the you out as I'm sales far had were than about X were X.X And shift, QX second did a the have on But

that the X.X million So $X.XX I X of between would miss say, and the million. the was, difference

the So I have was that second know you -- not part a if if I'm don't answered it. did of sure question, I

Yes.

have missed there. sales from quantify how -- you any QX, but QX? QX that QX, what have you Can sold more, selling Just into of said sort season just there in the picked from you into little may shift QX you ended a because the that's was into much there like

in of of just we we little QX said, I XXXX. QX ahead were a -- of versus were as 'XX Well, sales

of line million sales equivalent demand a season, are 'XX is natural. of bottom the the those pounds, than X.X -- would actual granular. more about Aztec, million to had what materially X.XX% of was I which of of bigger kind the did And say So X But is for we that the this that we pounds.

X.X is pounds million the So and between I mean, the X difference $X.XX the the million. reporting I'm

But of Scott be So X.X pick additional did of in on marginal to pickup substitute there'll the leaves XXX,XXX combined missed, we another we us pounds sales million equivalent short which Aztec. the was total as pounds. product, QX up alluded, but what a a

the more I going impact, the we make up? normalized know is demand? Or different missed inventories the it should there, those it's then forward sales just just just with good that to looking ability but And dynamics and see are

ahead, Go Scott.

Yes.

family think years. our through demand. to brands in we're normalized continuing this in anticipate see Impact I was then the had innovate more and described the my We to we that significant for brand space. 'XX that continue to referenced portfolio X the our dynamics I X we'll comments, We've for grow earlier. in growth last

brands within at to maybe see come -- pipeline. in X, least our you'll X So that

a follow-up it from looks And we like Chris question have Kapsch.

-- follow-up have just on a on Green and biologics I maybe on first. Solutions focused focused

is are if as it's the largest so M&A you to weren't committing -- forward more highlight a guys of focused sort the more maybe as It to seems guys now Corteva's wave in and within of at big probably the on market. were the resources the viewed development sort now mean, niche, of beachhead rest a maybe -- the more today, big developing efforts, fast on will, one the area crop like via growth sort They're a I single established protection. this. the focused of when But industry, when it. So of time is consolidation, going of you through that least

more Obviously, gets interesting. sustainability characters the

So just curious competitive? about guys how the to playing awareness the do on wondering Or that growth your how you've big seen in this affect be your positioning are these that marketplace portion delivering that as you beneficial with there? where goals more bringing out Has just the and see it given conversely, might to that's product, focus sector? your you we commercial become

let's growing business. versus a That with a question. here. fast, of space today most XX% question XX% than which would is the, feel the say, protection good It's very growth we're a We rate chemical I is market Bob in outpacing that very Chris, growth the a crop mature rate say, of, profitable, better margins segments.

We established we feel X plants have solid in the we manufacturing through that foundation acquisition. good, acquired with the Agrinos

both and good India. have We in RTP in also capabilities, research

market we've -- China people got we India. We've pipeline. the great throughout dedicated have that. we're Americas, the So in access market in access and got excellent an selling And structure

that I as example, therefore, business advanced as that that business. today opportunity we're think they us were companies structure. BioWake, see for model, know-how, to -- a about coming for so anybody because see is in from where And as an they you the shown us are

to another company, announced, also technology. which with is coming is us we which NewLeaf, their

in-house but getting only we also So opportunities. have technology, not licensing we're

to that we're space. only to feel it. in actually -- we're is with grow, positioned to very we're space That and grow going So be competitive going well we

a you have follow-up I know to if question So don't that, Chris.

appreciate also and you it were I joined would dear when company, that enthusiastic I pretty you the opportunity follow-up maybe SIMPAS to you color, is you. the And about was maybe Bob. there. the And we No, for that -- because and progress be something know that near the

provide is and and measure platform question think around or keep data given their it is focus it behind -- with SIMPAS delivering focused that mentioned you platform a momentum for going will. of in a track to was certainly economy, which which regard. on could growers of, that you that was The the I I guess, infrastructure decarbonizing seems also ag capture And like sort their this that. in carbon the may enable is our that And measure avoidance, if

planting still is now the that it really So just inputs there's wondering more just precision for focused on a a I'm delivering play right in manner? more SIMPAS in if Or regard?

mechanism you biorational as say, is SIMPAS, the for at delivery plant. products Well, perfect products nutritional or any

range. that developing we're So

those we have that announcements we are with that on We're The nutritional the partnership companies products. coming partnerships with have You've to us. seen the the [Indiscernible] side. -- we delivering other

now. We have process than can more opportunities we actually right

The through holdup products getting the those EPA. really is registered -- the

that and also, with health, for soil trial into that forward But to good right X see going bought products, to future. the just more through going we of soil a them now range, You're announcements the the opportunity that's of nitrogen health I were those lot goes seeing coming we're we fixation, And Agrinos everyone for the our remind market. that X want in one for results in we're us develops. market carbon getting tremendous work which a just as

validate goes the the of developing right, and to I of able ultimate And part where the measure be think that about it's, It's again, we up we're which able is being soil. measure, to what because wound trace talking system system, into and record. wanting to

up And validation his so third-party grower that practices. ability -- a to the as SIMPAS winds giving we're of implementing that that through the system, have the

as his to mentioned help biologicals going say, what our as Bob do capture far we're is -- So we're to let's that and far looking nitrogen nutrient practices as uptake. really as with reduction, the

we'll using platform before. So talked that be that's about the we that

more [Operator Instructions] doesn't any Okay. It like look questions. there are

it speakers So over back remarks. closing I'll our to for any turn

targets. Okay. disappointed we the a our Well, results the year. of continue and growth and phone making we importantly, quarters and do X I positive yes, the on listened strong platforms. first recovery over balance next that in. the track participated appreciate everybody that we we X X-year see we're of more today And Obviously, very the quarter, will report all with but good goals that to with on were on be our And for have progress also, ultimately

and we believe. shareholders' discussion thank another June I X, with have will you, the that, So with meeting on

everybody. Thank you, right. All

concludes your this And call.

now may disconnect. You