Good morning. My name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Compass Minerals' Q4 and Fiscal 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Brent Collins, VP, Investor Relations, you may begin.

Thank you, operator. Good morning, and welcome to the Compass Minerals fiscal 2022 fourth quarter earnings conference. Today, we will discuss our recent results and our outlook for fiscal 2023. We will begin with prepared remarks from our President and CEO, Kevin Crutchfield; and our CFO, Lorin Crenshaw. Joining in for the question-and-answer portion of the call will be George Schuller, our Chief Operations Officer; Jamie Standen, our Chief Commercial Officer; Chris Yandell, our Head of Lithium; and Ryan Bartlett, Senior Vice President, Lithium Commercial & Technology. Before we get started, I will remind everyone that the remarks we make today reflect financial and operational outlook as of today's date, November 30, 2022. These outlooks entail assumptions and expectations that involve risks and uncertainties that could cause the company's actual results to differ materially. A discussion of these risks can be found in our SEC filings. Our remarks today also include certain non-GAAP financial measures. You can find reconciliations of these items in our earnings release or in our presentation, both of which are also available online. The results in our earnings release reflect only the continuing operations of the business other than amounts pertaining to the condensed consolidated statements of cash flows or unless noted otherwise. The company's fiscal 2022 fourth quarter results and fiscal 2023 outlook reflect the previously announced change in fiscal year end from December 31st to September 30th. All year-over-year comparisons to fiscal 2022 fourth quarter and fiscal 2022 results refer to the corresponding period ending September 30, 2021. And now I will turn the call over to Kevin.

Thanks Brent and good morning, everyone. Thanks for joining the call today. We appreciate your continued interest in Compass Minerals as we work to reposition our company for its accelerated growth, reduced weather dependency, and sustainable value creation by expanding our essentials minerals portfolio into the adjacent markets of lithium and next-generation fire retardants. Fiscal 2022 was challenging from a short-term financial standpoint, but I believe it will prove to be transformative in the long-term. We continue to make meaningful strides in all three of our strategic focus areas, building a sustainable culture, delivering on our commitments, and leveraging our advantaged assets to create long-term shareholder value. I'll take a few minutes to highlight specific accomplishments in each of these three areas before turning the call over to Lorin to provide more details on our financials for the fourth quarter and full fiscal year and then provide some perspective on our outlook for 2023. Starting with employee culture, we took a number of actions over the course of fiscal 2022 to provide the tools and training necessary to ensure safe and responsible operations. I would like to salute each of our employees throughout North America and the U.K. for their contributions to the outstanding safety performance the company delivered this year. Through their efforts and supported by an increased focus on behavior-based safety training and engineering solutions, we maintained a consistent safety performance throughout the year. The result was a total case incident rate, or TCIR, of 1.27, reflecting a roughly 56% improvement year-over-year. To be clear, our ultimate goal when it comes to safety is zero harm, meaning no reportable injuries across our platform in a mining and industrial manufacturing environment that's obviously a very difficult target to achieve, but we owe it to our employees and their families to strive for absolute perfection when it comes to safety. We also continue to believe this goal is possible as evidenced by the fact that several of our operating sites completed the entire fiscal year with zero injuries. As I've stated previously, I deeply appreciate the level of care, focus, discipline, and collaboration essential to operating safely and responsibly, ensuring that each employee returns home to their family in the same condition as they left. This is and always will remain a top priority for Compass Minerals. When your culture is strong, it provides the foundation for execution, which was our second area of strategic focus, delivering on our commitments or put another way, doing what we said we were going to do. A year ago on this call, I talked about our commitment to protecting our balance sheet, strengthening our core assets, and increasing our focus on the high-growth opportunities in the lithium and next-generation fire retardant market. From a portfolio perspective, we completed the sale of our South America Chemicals business and received the maximum earn-out payment associated with the sale of our South America Specialty Plant Nutrition business using proceeds from both transactions to reduce our debt. To ensure we have the leadership in place to take advantage of our emerging growth opportunities, we bolstered our senior management team with the addition of key executives, including Lorin Crenshaw, Chief Financial Officer; and Chris Yandell, Head of Lithium, deepening our team's financial expertise, industry perspective, and advanced battery supply chain experience. I can't overstate their influence on our achievements this year, and I'm thrilled to have them on board and look forward to their continued partnership along this journey. We also brought in the governance acumen of our Board through the appointment of Gareth Joyce, Rich Daly, Ed Dowling, Melissa Miller, Jon Chisholm, and Shane Wagon, who collectively enhance the Board's operational, financial, advanced battery supply chain, and human capital management expertise. And with an eye toward the future, we continue to invest in the safe and efficient operation of our core assets through continuing to progress on our Goderich mine plan and a much-needed upgrade to our Cleveland launch mine. Turning to our financial performance for the full year. As I indicated earlier, fiscal 2022 was challenging from a financial and operating perspective for a variety of reasons. As we've discussed on past calls, the inflationary pressures that all industries have had to deal with in 2022 had a particularly acute impact on our Salt segment as the contract architecture of our North American highway business does not allow for the pass-through of inflationary costs in real time. As a result, our profitability was severely tempered by historic levels of inflation, resulting in higher distribution and production costs. We took actions throughout the year to partially offset some of those effects, primarily through raising prices within our consumer and industrial business. However, ultimately, the impact of these efforts fell far short in comparison to the inflationary effects causing the profitability of our Salt segment to come in well below the inherent earnings potential for this business. The most impactful action we could take during the year to restore the profitability of this business was to approach the recent North American highway deicing salt bidding season with a very disciplined strategy, emphasizing value over volume, and that's precisely what we did. As a result, we expect pricing in 2023 to rise on the order of 15% and volumes to decline on the order of 9%. I'm pleased with the team's efforts and expect to see substantial progress in fiscal 2023 as measured by EBITDA per ton rising to match or exceed the $20 per ton in EBITDA that the Salt segment has delivered on average over time, up from approximately $15 EBITDA per ton it delivered in fiscal 2022. Our Plant Nutrition business had a strong year from a profitability perspective, with EBITDA per ton of approximately $245 above the long run average for this business. However, we continue to be challenged throughout the year to deliver production volumes in line with historical levels. On that measure, we fell short of what we believe is the inherent potential for this business. Again, Lorin will provide more color on the financials in a bit. While navigating these short-term challenges to our core businesses, we stayed laser-focused on advancing our third strategic focus area, leveraging our advantaged assets to reposition our company for future growth. One dimension of that repositioning relates to our strategic investment in Fortress North America, a next-generation fire retardant company, focused on reinventing wildfire application technologies to make them safer for the environment and also more effective. The Fortress team had three primary strategic objectives for calendar year 2022; secure adequate capital for full commercialization, bolster the leadership team, and advance each main product, FR-600, FR-200, FR-100, and FR-105, closer to qualification and commercialization. From a funding perspective, our $45 million equity investment this fiscal year increased our stake to roughly 45% and helped position Fortress to build out its manufacturing infrastructure, stockpile inventories of raw goods, and begin hiring key staff. From a people standpoint, Fortress made great strides in 2022, naming a Chief Manufacturing and Supply Chain Officer and a Chief of Airbase Operations, who formally served as the U.S. Forest Service Director of Fire and Aviation Management for California Region 5, the U.S. Forest Service's largest region in the entire country. They've recently recruited several highly skilled air-based infrastructure and operations managers with decades of experience building and operating air tanker basins. Product-wise, FR-600, a ground retardant was fully qualified in early 2022 and placed on the U.S. Forest Service's qualified product groups. Fortress production successfully provided revenue-producing test volumes for select clients with use cases focused on utility, residential, and commercial properties. FR-200, a liquid concentrate aerial retardant successfully passed all required tests and completed all operational field evaluation requirements, which included successfully air dropping the required 200,000 gallons under live wildfire conditions, which Fortress performed at an air base located in Montana. FR-105, a second-generation dry concentrate aerial retardant has successfully passed all required tests and commenced its operational field evaluation, which we expect to be completed during the 2023 fire season. Finally, FR-100, Fortress' first-generation dry concentrate has passed all required tests and has successfully completed its operational field evaluation requirements. We're pleased with the progress that Fortress has made, a couple of important milestones that are not entirely within the team's control but essential to breaking through are the completion of the Environmental Impact Statement, or EIS, by the U.S. Forest Service and substantially being awarded air-based allocations and attendant contracts. This EIS is scheduled to be updated every 10 years and expired in December of 2021. Our working assumption was that it would be finalized by the end of calendar year 2020. That didn't occur, and the EIS is now roughly 11 months behind its regulatory exploration date. We expect the magnesium chloride formulation at the heart of Fortress retardants to be confirmed as acceptable reviews as part of the EIS. As a result, we expect the eventual completion of this study to provide the necessary environmental clearance for Fortress aerial fire retardants and to set the stage for bringing their highly effective, more environmentally friendly flame retardant to market. On the lithium project front, most of you are well aware of the significant progress we've made this fiscal year. In September, we provided a comprehensive overview of our strategic path forward to maximize the value of our North American lithium brine resource. As a part of that strategic update, we announced the achievement of five key milestones. First, we announced a $252 million strategic equity investment from Koch Minerals & Trading LLC to advance Phase I of the development of our lithium brine resource, explore opportunities for execution synergies across the company and further align our capital structure with our strategy through additional debt reduction. Second, we shared the selection of Energy Source Minerals as our Phase I DLE technology provider after three years of extensive testing of multiple DLE technologies and providers. We also shared results, including a technical report summary of our FEL-1 engineering entity, confirming that our project is projected to be highly cost competitive, the lowest by our estimation on the entire domestic lithium cost curve, leveraging our robust existing infrastructure. Fourth, we announced our intention to construct by 2025 the conversion facility at our Ogden, Utah solar evaporation site with a target annual production of 11,000 metric tons of lithium carbonate with an expected NPV of between $626 million to $985 million and an after-tax IRR of between 28% and 36% on estimated development capital of approximately $262 million at an FEL-1 level of accuracy. Finally, we announced the completion of a lifecycle assessment confirming a strong sustainability profile for Phase I of our lithium development. From a valuation perspective, the projected after-tax NPV of Phase I of our lithium project is approximately $626 million, assuming an average lithium carbonate selling price of approximately $16,000 per MT, which equates to nearly 40% of our 30-day average market cap of approximately $15.25 per share. Similarly, the NPV of Phase II of our lithium development is projected to be approximately $1.4 billion, assuming an average lithium hydroxide selling price of approximately $17,000 per MT, equating to roughly 85% of our 30-day average market cap and approximately $34 per share. It's worth noting that the average sales price for lithium products used to calculate these NPVs is but a mere fraction of today's indicative pricing, highlighting the upside leverage our project represents. Together, the growth opportunities we're undertaking clearly represent sizable potential upside for our business and one that we would expect to benefit our employees, community, and our shareholders alike. Overall, we believe the actions we've taken in fiscal 2022 lay the foundation for an increase in the absolute earnings power of Compass Minerals and our long-term earnings growth rate and ultimately in the valuation of our company. With that said, the fact that our stock price is trading at a considerable discount to the value of successfully executing our lithium development suggests a considerable potential upside. It also likely reflects a measure of skepticism among investors in our view. Our leadership team and employees embrace the execution challenges before us and expect to resolve the current valuation disconnect over time through successful execution. Looking ahead, our focus in 2023 will be to deliver improved overall financial performance and continue advancing our transformation strategy with an emphasis on the following six strategic objectives. Number one, building on the outstanding safety performance of the past 12 months to continue our drive toward zero harm across each of our facilities. Number two, restoring the profitability of our Salt business to the levels we've demonstrated in the past. Number three, developing and executing strategies to improve the reliability and sustainability of our SOP production, which should allow for increased production levels over time. Number four, achieving the commercial and project-related milestones on our roadmap to advance Phase I of our lithium development. Number five, supporting Fortress North America's efforts to become the first new entrant in the market for fire retardant chemicals in two decades during the upcoming 2023 wildfire season, subject to the completion of the EIS. And last, number six, continuing to enhance our overall financial standing and maintain our overall credit profile. In closing, I'm excited about the path we're on and the sizable opportunity before us as we execute our strategy to accelerate our growth, raise our earnings power and reduce our weather dependency. I believe that we have the right team and the right strategy in place to realize this opportunity and create real value over time. With that, I'll now turn the call over to Lorin, who will discuss our financial performance in greater detail and our outlook for the fiscal 2023 year.

Thank you, Kevin. On a segment basis, Salt revenue totaled $188.9 million for the fourth quarter, up 18% year-over-year, driven by 15% growth in sales volumes and a 3% increase in average selling price. Both the highway and C&I businesses delivered higher sales volumes versus the prior year. Highway average selling price was up 7% and C&I pricing rose roughly 5% primarily due to continued price increases to offset inflationary pressures. On a full-year basis, Salt revenue grew 12% to approximately $1 billion on an 11% increase in sales volumes and a 1% increase in average selling price. Despite higher revenue, Salt operating earnings declined 27% to $16.3 million for the quarter and by 34% to $117.4 million for the full year as increased production and distribution costs more than offset revenue growth. From a cost perspective, roughly two-thirds of the full-year increase was driven by higher shipping and handling costs, which rose 19% to roughly $28 per ton and one-third by higher all-in production costs, which rose 7% to roughly $43 per ton. The increase in cash cost was primarily driven by inflationary impacts and higher maintenance costs. The increase in shipping and handling costs primarily reflected the combination of inflationary impacts such as fuel surcharges and higher cost to serve our markets due to geographic mix. Turning to our Plant Nutrition segment. Revenue for the fourth quarter grew 17% to $57.8 million, despite a 22% decline in sales volumes on higher pricing. Specifically, average selling price rose 12% sequentially to over $929 per ton and was up 49% year-over-year, reflecting the continued favorable supply/demand dynamics impacting the global fertilizer sector during the period. Operating earnings were $12.6 million, up from a loss of $0.2 million, and EBITDA was $21.8 million, more than doubling year-over-year. Higher average selling prices more than offset the impact of lower production volumes on sales and cash costs, resulting in operating margins of 22% and adjusted EBITDA margin of 38%, both up substantially year-over-year. Plant Nutrition's full-year results reflected operating earnings of $37.1 million, over four times higher than the prior year levels and EBITDA of $72.7 million, up 62% year-over-year, driven by a strong pricing environment. On a consolidated basis, revenue was $249.4 million for the fourth quarter, up 18% year-over-year and rose 9% for the full year. Fourth-quarter adjusted consolidated operating earnings increased $2.7 million year-over-year to $5.1 million and declined 42% to $65.3 million for the full year. You'll notice in this quarter's income statement that we've broken out the impact of our equity method investment in Fortress. We currently own approximately 45% of Fortress and pick up our proportionate share of their net income or loss as a non-cash item in our income statement. Adjusted EBITDA from continuing operations includes the drag on earnings related to our early-stage strategic initiatives in lithium and next-generation fire retardant. In the fourth quarter, adjusted EBITDA increased by 6% to $35 million, which includes $4 million of costs for lithium and the non-cash loss related to Fortress. For the full year, adjusted EBITDA from continuing operations was $187.1 million, down 22% year-over-year. This included $13.1 million of costs for those same strategic initiatives. From a leverage standpoint, we ended the year with net leverage of 4.6 times as defined by our credit agreement. Throughout the year, we took several steps to align our financial policy and capital structure with our strategy to accelerate growth and reduce the weather dependency of our earnings profile, including recalibrating our dividend, earmarking $200 million of the net proceeds from the Koch equity investment towards funding Phase I of our lithium development, and approximately $40 million for permanent debt reduction; and finally, completing the divestiture of our South America Chemicals business and applying the net proceeds towards debt reduction. We are thrilled to be fully funded from a lithium development perspective through 2024, and the approach that we took demonstrated our commitment to funding our growth in a financially prudent manner. From a free cash flow perspective for fiscal 2022, despite the substantially below trend adjusted EBITDA performance and a $45 million investment in Fortress, we nevertheless delivered positive free cash flow of approximately $18 million, benefiting from the $51 million in proceeds from the sale of our South America Chemicals business and an $18.5 million earn-out payment associated with the sale of our South America Specialty Plant Nutrition business. Overall, our financial flexibility, liquidity, manageable debt maturity profile, and amended credit facility give us confidence that we are well-positioned to manage through a wide range of potential weather-related outcomes in fiscal 2023. Shifting towards our 2023 earnings outlook, first of all, investors will notice that we have modified our approach to providing adjusted EBITDA guidance from only providing guidance assuming normalized winter weather to providing a range of potential outcomes. Although on average and over time, demand for deicing salt is stable, it's virtually impossible to reliably and accurately forecast in any single year, winter weather activity and deicing sales volumes in the North American and U.K. markets that we serve, given the highly weather-dependent nature of demand. Accordingly, this year, we provided a projected range of potential earnings outcomes that consider various winter weather scenarios, including the potential impacts of mild or strong winter weather. I'll start by framing our expectations for salt and plant nutrition and then lay out the high-level strategic milestones we expect to accomplish for lithium and Fortress, our two primary growth initiatives. Starting with the Salt segment. The 2023 range that we provided reflects our current book of business for fiscal 2023, and then assumes normalized weather conditions and average historical sales to commitment outcomes. Overall, sales volumes for the de-icing business are expected to be down approximately 7% year-over-year, which is consistent with our focus on value over volume during the recent bidding season. As Kevin indicated earlier, we expect North American highway deicing pricing to rise roughly 15% compared to prior year bid season results. This translates into a projected increase in pricing at the Salt segment level of approximately 9% year-over-year. Within our C&I business, we expect pricing to be up a couple of percentage points year-over-year on similar volumes. Under those parameters, we would expect Salt segment EBITDA in the range of $215 million to $255 million in fiscal 2023. Overall, assuming normalized winter weather, we expect our Salt segment to show improved profitability year-over-year to around $20 of EBITDA per ton, up from roughly $15 per ton in fiscal 2022 on higher pricing driven by our successful efforts to pass through inflationary and fuel impacts incurred in fiscal 2022 as part of the recent bidding season and recalibrating our mix toward geographies where we have natural competitive advantages that enhance our profitability. Achieving EBITDA per ton of around $20 or more would reflect a successful restoration of the profitability of this business to historical levels, which was our objective heading into the most recent bidding season. In our earnings release and earnings deck, we have also provided the estimated impact of volume, revenue, and EBITDA for the Salt segment during mild and strong winter weather scenarios. These bookings entail significant estimates by management that use an array of information, including historical weather data and sales to commitment outcomes. In Plant Nutrition, higher unit costs, reflecting elevated production costs, are expected to result in lower profitability as measured by EBITDA per ton on a year-over-year basis on relatively flat sales volumes. As background, SOP production levels in any given year are ultimately a function of the amount of time available to harvest between September and May, which are, in turn, a function of the quality of the evaporation season, which occurs between May and September. Unfortunately, the 2022 evaporation season resulted in less potassium deposited in the ponds year-over-year due to less than favorable weather conditions, which will adversely impact our fiscal 2023 production capacity. With a focus on servicing our long-standing customer relationships and maintaining our position as the primary North American producer of SOP, this year, we will purchase potassium chloride as a supplemental feedstock, an effective approach to driving more tons, but one that yields lower than normal margin at current potassium chloride prices. In addition to the increased use of potassium chloride in 2023 compressing our margin, costs per ton are also expected to be higher due to a combination of higher per unit pond processing costs, which have a significant fixed component, and incremental costs related to actions we are taking to mitigate the impacts of the ongoing drought at our Ogden facility. Pricing-wise, we expect to continue benefiting from a broadly constructive global fertilizer supply/demand dynamic. Our guidance calls for a modest year-over-year increase in the average SOP price on a full-year basis with pricing in the first quarter of 2023 expected to track roughly in line with the fourth quarter of 2022 before moderating each quarter sequentially thereafter. Our view on SOP pricing reflects our best estimate at this time and one that we'll update quarterly throughout the year. In 2023, we will remain focused on implementing both short- and long-term solutions to improve our ability to predict annual SOP production levels to operate more consistently and reliably through data and science-based approaches that enable us to evaluate the myriad of weather and chemistry conditions impacting production. In the near term, we're in the process of further refining engineering controls and design such as raising our dikes, improving access to brine, more efficient use of freshwater, and upgrading pumping systems to maximize harvest tons. For the long term, we have undertaken a detailed review of our holistic end-to-end process designed to optimize our pond chemistry and ultimately ensure more sustainable and reliable SOP production levels, including both pond-based and supplemental potassium feedstock, further solidifying Compass Minerals as the leading SOP provider in North America. Overall, we expect the key drivers of this segment's profitability in fiscal 2023 to be production yields and unit costs at our Ogden facility and the impact of global price market dynamics on SOP pricing and volumes. Based on our current outlook, we expect that the Plant Nutrition segment will generate EBITDA of between $55 million and $70 million. I'll now provide some commentary on a few other financial measures that are important to forecast our business. Starting with CapEx, our capital spending forecast of between $175 million and $230 million is divided into two categories, with sustaining CapEx related to salt and plant nutrition of between $100 million and $110 million and growth CapEx of between $75 million and $120 million earmarked for lithium development. As a reminder, the net proceeds from the Koch equity contribution were received in mid-October and therefore, are not reflected on our 9/30 balance sheet. However, we intend to use those proceeds to fund the lithium-related CapEx and proceeds from our core operations to fund sustaining CapEx. Over the next three years, until late 2025, when we expect Phase I of our lithium development to come online, it will be important to distinguish between free cash flow with and without lithium-related CapEx to maintain an accurate pulse on the results of our core business. We will assist in that regard by breaking out lithium versus non-lithium CapEx in our reporting. On the topic of lithium, I would also note that lithium-related operating expenses are projected to be in the range of $10 million to $12 million this year versus $8 million in fiscal 2022. While in the short run, these costs compress our profitability, they are essential investments enabling us to execute on an opportunity that we believe represents substantial upside and an exceptional proposition for our stakeholders. Finally, we expect our effective tax rate to be in the range of 30% to 35%, excluding any additional expense related to valuation allowances on deferred tax assets. Now turning to Fortress. In our view, 2023 has the potential to be a breakout year with the company's FR-200 and FR-100 aerial retardants having the greatest potential to impact results. Given that several catalysts are outside of Fortress' direct control, we've chosen not to assume any financial upside for Fortress in our guidance. Instead, we have forecasted our share of its assumed losses, which are included in the corporate facet of our guidance and will be around $5 million. However, as Kevin mentioned earlier, if the EIS is approved in time for the 2023 wildfire season and Fortress is awarded bases, 2023 could be the year that the company starts gaining traction. The key 2023 strategic milestones for Fortress are detailed on slide 10 of our earnings presentation. But at a high level, they include advancing commercialization of FR-600, supporting the EIS process, and ensuring operational readiness to deploy FR-200 and FR-100 and, upon EIS approval, securing an initial tranche of airbases. Finally, turning to lithium. In September, we laid out a comprehensive strategic plan detailing our path forward to build an 11,000 metric ton battery-grade lithium carbonate production facility expected to come online in 2025. The related transcript technical report, presentation and replay may be found online under the Investor Relations section of our website. We are excited to officially shift from evaluation mode to execution mode on a strategic journey. We expect to reposition Compass for accelerated growth and reduce weather dependency over time. Over the next several quarters, we expect to accomplish the following strategic milestones, securing additional definitive offtake agreements together equivalent to at least 80% of the 11,000 metric tons of anticipated Phase I battery-grade lithium carbonate production capacity, completing an FEL-2 level engineering estimate for Phase I by March, completing an FEL-3 level engineering estimate by June, and achieving mechanical completion of a commercial-scale BLE unit by December 2023. I'd note that we broke ground on this unit in the middle of November, which was slightly ahead of our plan. Finally, for several years, we have issued two snow reports a year, one in January and one in April. These reports have historically summarized winter weather activity as measured by snow events in 11 representative cities in our primary North America highway deicing service area. In fiscal 2023, we will no longer issue stand-alone snow reports as press releases, but will continue to provide perspective on snow events during our first and second quarter earnings calls. The snow events data for the 11 cities is readily available and a reasonable indicator of winter weather conditions in these cities. However, as we have shared in the past, several factors make snow events in these cities an imperfect proxy for our actual quarterly sales to commitment levels, which ultimately are what drives sales volume. For instance, all this data set reflects relatively large cities, for which data is readily available; we don't only serve large cities. We typically serve broad swaths of states that include rural areas, metropolitan areas and everything in between. In addition, certain regions such as the U.K. are important markets for us but don't have similar public information that allows us to include these regions in our snow report. Other factors that make the snow report an imperfect proxy include winter severity and year-over-year variations in customer inventory levels. Going forward, we look forward to continuing to provide perspective on snow events with our quarterly earnings results rather than on a stand-alone basis. With that, I will turn it back to the operator to open the lines for Q&A.

Thank you. Our first question is from Joel Jackson with BMO Capital Markets. Your line is open.

Hi good morning. This is Alex Chen on for Joel Jackson. Thanks for taking my questions. For my first question, it seems like Salt margins are expected to improve 100 basis points year-over-year. Can you maybe provide all the puts and takes to get to this improvement between 15% higher pricing, cost inflation and other components? And maybe what needs to happen to recover the remaining 500 to 600 basis points of margin to get back to 2021 levels?

Yes, Alex, it's Kevin. I'm not sure that I agree totally with your premise, but let me try to address it in the context of the guidance we've given. So, we experienced about a 15% price increase across our highway deicing sales for the season, and that's against the backdrop of about, I think, about a 9% reduction in volume on a year-over-year basis. So, our view is that gets us back into the two-handle zip code from a margin perspective, EBITDA per ton, and that's also got a fair amount of the inflationary effect that we've experienced in 2021 carrying into 2022 as well. So, to the extent that, that inflation abates unexpectedly or inconsistent with our plan because we were pretty conservative, you can see that margin expansion replicate our view and kind of where we were in 2021. But look, it's a function of the weather out of our control and function of the inflation semi out of our control. So, we're comfortable with the guidance we've given that we're back kind of into that two-handle range with potentially some upside based on how the winter unfolds.

And I would just add, when the commercial team enters into the bidding season, we're thinking about profit per ton, and your question started with margin. Over the past decade, our average profit per ton has been about $20, and that's what the team has achieved. And so, we've restored the profitability to historical levels on a profit per ton basis, and that's the way we entered the bid season.

Appreciate that color. Thank you. And for my second question, we've seen diesel prices increase since bid season and river barges are currently challenged. Is there a concern over barge availability this winter? And if you can elaborate on the costs you expect from maybe higher diesel and barge issues in fiscal 2023 and if we could expect significant increases in barge-related costs for maybe 2024?

Sure. Thanks, Alex, this is Jamie. Obviously, the Lower Mississippi experienced low levels pretty much over the last six or eight weeks. But over the last few weeks, we've seen a lot of rain in the Midwest, and the levels have come back up. We had some short-term concerns about it, but now it's pretty well normalized. We've got the barge traffic that we need on a covered barge basis. I would also say, most of our material is already deployed and has been deployed. We started that work in April and, throughout the summer, we shipped the Upper Mississippi and then moved down as the season goes along and served the Ohio River. So, we don't expect any impact this winter. As it relates to rates going forward, we basically have CPI type adjustments in our agreements as well as fuel surcharges. So depending on fuel, we could see perhaps some relief there in 2023. And then, as it relates to CPI, we monitor that closely and would expect perhaps a flat to maybe slightly higher, but that remains to be seen.

Thank you for that. And one last question, if I may. Are we correct to assume that implied company-wide fiscal 2023 EBITDA guidance is around $220 million to $230 million after adjusting for corporate costs? And maybe you could talk a bit about why only the segment EBITDA guidance is provided and not company-wide guidance?

Yeah. So, thanks for that question. So, we've taken a different approach to earnings guidance this year that really reflects the reality that, although over a long period of time this business is stable and delivers profitability and volumes at what I would call the middle of the bell curve when you think about snow days. In any given year, the earnings profile ranges, and so what we've done is provide investors more information than we ever have with respect to the range of potential outcomes in terms of the earnings power of the business. The way you get to an EBITDA is simply to add the segments and subtract corporate expenses; that's the way we've always done it. But rather than focus on a specific numeric adjusted EBITDA, we're providing a range of potential outcomes. And so, in that 2023 range on slide 17, the midpoint is on the order of 220, and on the high side, it approaches in a strong winter, 270. But our focus is on having a conversation about earnings power as opposed to just a normalized earnings number. And so, that's the way I'd look at it.

Perfect. Thank you so much.

The next question is from Jeff Zekauskas with JPMorgan. Your line is open.

Thanks so much. There was a lot of snow in Buffalo recently, and there has been some snow in the Midwest. How's your first quarter looking, sort of year-over-year, when you look at November volumes versus history? Have things been unusually strong or are they normal or weak?

Yes, Jeff, I'll come in, and let Jamie provide some additional color. I mean, yes, Buffalo got hammered, I don't know, something on the order of 40 inches. We would prefer 10 4-inch snows as opposed to one 40-inch snow, obviously. But I think, we'd say that the season thus far is off to a pretty good start. We're early in just a couple of months, but so far so good. Anything you'd add, Jamie?

I'd say, yeah. It is certainly early. We do like the flow; we like the order book. We're already refilling some depots. We've seen nice weather, kind of Northern Illinois, Wisconsin, Western Michigan, which has been great to see that start. Historically, a bit early, it does need to continue throughout the season obviously. And then, don't forget about the West. We've seen a lot of snowfall in the Sierras, the Rockies. We do sell rock salt in the West as well out of Ogden. So that bodes well for drought conditions and lake levels there, as well on the operations side. So, really feel pretty good about how we've started the season.

So, can you provide any quantification of what's happening?

No. We believe we are progressing according to our plan. This start appears to be slightly ahead of expectations. However, the season is long, and most of the winter weather activity for our first quarter, which is in December, takes place in that month. So, we're currently right on target.

And I would just say, it goes back to the whole bell curve. Every month is a statistical data point on that bell curve. So, it would be entirely premature to speculate about how the next couple of months are going to transpire, but we're off to a good start in terms of mother nature.

I wasn't asking you to speculate; I was just asking you to reflect on what has occurred. In your commentary on Plant Nutrition, what did you mention about first quarter plant nutrition prices? Did you indicate that they would be roughly flat compared to the fourth quarter or flat compared to the first quarter of 2022?

We mentioned it would remain flat compared to the fourth quarter. For the quarter we just reported, that's correct, before then tapering off throughout the year.

What was your accounts payable in the quarter and what's your cash tax rate for next year?

In terms of cash taxes, I think a number in the 20% or 25% range is a good number to use as far as our accounts payables or at the end of the year.

Yeah.

I don't have that number at my fingertips. We'll follow up with you on that.

Okay. And then lastly, you talked about prioritizing sort of value over volume in salt. What does that really mean? Does it mean that you don't want to ship unprofitable tons, or they are profitable tons that you do want to ship, but they are profitable tons that you don't want to capture because the margin you find insufficient? Can you explain what the value over volume approach means?

Our focus this year was to identify and leverage the value in the marketplace, which we believe we successfully accomplished across the board. Additionally, we relocated some of our operations to regions where we have competitive advantages, making it easier to serve certain parts of Illinois and Pennsylvania, for example. As a result, we believe we have optimized our business while aiming to restore more historical margins that we consider significant. The team performed well, and this is just the beginning of a two to three-year journey to recapture that value. Essentially, it's about prioritizing value rather than simply shipping more volume.

Thank you so much.

And yes, the accounts payable at the end of the year was on the order of $115 million.

And the next question is from David Silver with CL King. Your line is open.

Good morning. I have a couple of clarification questions to start with, and then I would like to ask about the lithium project. Earlier in the Q&A, I think Lorin mentioned a $220 million target for your fiscal year 2023 adjusted EBITDA. I'm wondering if we need to adjust that figure to make it a bit higher, particularly considering stock-based compensation. Is that $220 million the midpoint of the base-case assumptions, or should we make additional adjustments?

Sure. So, I wouldn't suggest any adjustments related to stock-based comp. But as you think about the earnings power of our business, we've restored salt to where it is, and if you want to think about earnings power, I would underscore that. There is roughly $20 million of expense embedded in that $220 million number related to lithium and Fortress, which are investments that we're making that we fully expect to engender returns to investors. But at the moment, it's about a $20 million drag on that $220 million related to those two businesses. Our Plant Nutrition business has averaged kind of in the mid-70s of EBITDA over the past decade, and we're projecting it to be about in that sort of low-60 mark. And so, from an earnings power perspective, those are the kinds of things I would think about, and then I would think about Fortress. When we think about Fortress and earnings power, as we said on the last earnings call, this is about a $300 million addressable market. If you look at the monopoly that is currently in play and you look at those margins, it's about a $90 million profit pool that's implied. And so, as we get market share in that business, that would add to that earnings power. So, those are the kinds of things that I would think about from a long-term perspective.

Okay. Thank you for that. And then, just one other thing. It's been a few quarters, but we haven't really had an update on the major upgrading program at Goderich. And as you think about the fiscal year 2023, I mean, could you just maybe update us on how things are going underground there and whether there is a meaningful improvement in the underground mining efficiency, let's say, fiscal year 2023 versus fiscal year 2022? Thank you.

Yes, David. I mean, I would just say, and George is in here and he can add color, but we continue to advance the new mine plan, as we discussed on a number of occasions before. The first step in that is creating these new permanent long-term 50-year roadways to connect the existing shaft system with the mine works out in the West. Those are kind of on the order of about 50% complete. So that's the first step in a long series of steps to reposition the mine. George and his team are also developing the West to set these rooms as we've described before to maintain quality and good mining conditions and that sort of thing. So, we continue to progress; it's a plan that we're implementing; it will take a number of years, but I would say that the progress is on track. Would you want to add anything to that, George?

Yes. Maybe just a little bit there, and thanks, David, George Schuller. I think, as Kevin highlighted, Goderich has continued to be on track and continued to meet and exceed expectations, starting with safety in our growth there as far as our new mine development and the existing assets, or existing parts of the mine that we have. So at this stage, I'd say we're on track, maybe slightly ahead of being on track for that. I think when Kevin laid this out a couple of years ago, he started, said it was probably a four- to five-year journey for us to get there. So, we're tracking extremely well there, and again really no negatives, expect to see that progress in the next, I'll call it, two, two-and-a-half years.

Okay. Great. I have a couple of questions on the lithium project. I'll ask them both here. Firstly, regarding the binding agreement with LG., congratulations on that. I mean, I do recall there was another party, Ford Motor, that signed the preliminary MoU. Should we be expecting something similar from Ford Motor regarding a binding agreement? And would that be kind of the main piece of the puzzle to get to that 80% target, I guess, of committed sales from the Phase 1 production that I believe was mentioned in your earlier remarks? So that would be one question. Second question would be about the Koch Industries' investment. And I'm just wondering, does their investment come with any future optionality? So, in other words, might they have a right of first refusal if you were to pursue additional investment down the road? Or does their purchase price, should they choose to make further investments, have any price cap, or any other optionality regarding the Koch investment that we should keep in mind as this project progresses over the next several years? Thank you.

We’ll address those questions in reverse, David. The Koch investment is straightforward. They invested $252 million for an ownership stake of approximately 17.5%, making them a significant investor. We consider them a partner, as they offer valuable resources related to lithium and the OPD Group, as well as in bulk commodities. We see potential synergies in areas like transportation and procurement. There are no hidden rights or terms beyond the partnership with BCI. Regarding Ford, I'll let Ryan provide more details, but we are advancing our agreement with Ford and will see how that develops. Ryan, do you have anything to add?

Yes, David, this is Ryan. I would just say that LG early on has proven to be a very collaborative partner, and we're excited for the deal that we put down with them. We do continue to progress discussions with Ford, as well as with other potential customers to get to that 80% of Phase 1 volume. So, as we have updates for that, we'll provide them.

Okay. Great. Thank you very much.

Thank you, David.

And the next question is from David Begleiter with Deutsche Bank. Your line is open.

Thank you. Good morning. Kevin, looking at Slide 12, congrats on the DLE breaking ground. What's the limiting factor in perhaps pulling forward lithium carbonate conversion facility to an earlier start date here?

Did you hear that, Chris?

Yes, I did.

I'll let Chris answer that.

Yes. So, thank you again for recognizing that we did break ground earlier this month with regards to our DLE commercial unit that we're looking to verify for scalability. As far as pulling the project forward, what we're really doing is we're moving forward on proving out scalability of DLE with our 400 GPM unit, which we anticipate to be mechanically complete by the end of 2023. During that time, we're also progressing with our FEL-2 on the entire East side. We expect that to be complete at the end of March next year. And the FEL-3 aspect, we expect it to be complete by the end of June next year. That really allows us to start some of the earlier groundwork we'd have to do with regards to the overall East side. In addition, what we're going to get out of that is the net equipment that we'd have to buy for the conversion facility to make long lead. So, we're looking at a multitude of different angles of how we kind of crash schedule and accelerate that. But currently, the schedule that we have regarding being operational in 2025 remains our realistic schedule.

Understood. And just on DLE, once the commercial, once it's mechanically complete in late 2023. What's the process to validate the technology during 2024? What are the steps you will be doing during that year to validate that it actually does work?

Once we complete mechanical work, we will move into commissioning and startup. We plan to review our results from previous pilot programs and compare them to our expectations regarding the feed type ratio we discussed in September. We mentioned that we increased our lithium output while reducing magnesium, and we have certain expectations for magnesium content at lithium yield from DLE. This will be part of our verification process, along with assessing operability and identifying improvements in mechanical design as we work through the overall field restrictions.

Yeah. Maybe – this is Ryan. I'll just add on to what Chris said there. We will have a very specific DLE, or design of experiments, that would mimic what we've done with the other pilot plants that have proven to scale ESM's ILiAD technology. What we're looking for is really the ability to match what we've seen with those other scales. We remain highly confident that we'll be able to do that with this full-scale commercial unit, and we're excited to get it up and running.

Great. I guess, one more question. Just maybe Lorin on shipping and handling costs, what should we expect for 2023? Have you seen any relief at all in some of these salt shipping and handling cost metrics?

Yes. I think, for the full-year number, around say $30 is a good number to use. And we've, through our commercial team's success in the bidding process, been able to capture our best estimate of what those costs are going to be. To the extent that we see continued inflation, we will run the same playbook that we ran last year, which is to raise prices in our C&I businesses as we are able to and to recoup any inflation as we've proven that we can do through next year's bidding season. We are also, from a fuel perspective, exploring a hedging program that would allow us to mute the impact on some fraction of our fuel cost. Jamie?

Yeah. I would just clarify, as you think about the full year maybe approaching that $30 range for salt we're talking specifically, and then it would be a little more front-end loaded. So there'll be a bit higher in our first and second quarters, and then it should be kind of taper off as we get into the second half of the year. As for plant nutrition, most of that material moves via rail; rates and volumes are down, so unit costs are up. There is a fixed component of shipping and handling in our Plant Nutrition business. So, you would expect to see higher shipping and handling in the Plant Nutrition business.

Thank you very much.

The next question is from Chris Shaw with Monness, Crespi. Your line is open.

Yeah. Good morning, everyone. How you doing?

Hi, Chris.

I have a couple of clarification questions. Following up on the previous topic, I wanted to confirm the guidance for the Salt segment regarding costs. Are you assuming the same costs from 2022, including the fuel surcharges? Additionally, are those fuel surcharges still being applied by your suppliers?

Nothing has changed in terms of the contract architecture in terms of the fuel surcharges. When we enter into the bidding season, we are assuming that nothing changes, and so nothing has changed there. And so, as I said earlier, for the salt business, you're looking at something like $30 for the full-year for logistics, and maybe something more like $40 for cash costs.

Yeah. Thank you. And then, in the Koch mining relationship, I know you were just talking about before, but has anything been figured out yet in terms of if there is any savings for 2023 in terms of logistics or anything or is that going to take a while for them to get more involved?

Yeah, Koch center.

I'll take that one, Kevin, if you want.

Yeah, please.

We are currently assessing all available opportunities. The main prospects lie in logistics and transportation collaboration, specifically partnering on significant procurement contracts related to bags and pallets. We recognize a genuine opportunity there. Additionally, we are exploring optimization across our network of depots, which includes terminals operated by terminal operators, to create added value. These are our primary focus areas, but we are not yet in a position to provide specific figures; however, discussions are progressing positively.

Got it. And then just a quick one on the fourth quarter highway salt volumes. They seem pretty strong. I was just wondering, was that pre-buying for this season or were there a bunch of customers maybe taking advantage of the lower pricing from last year's contracts?

Yeah, there's a couple of things going on there. We were still delivering into some of last year's contracts. So, you saw a little bit of incremental volume related to kind of the Illinois, Indiana area to be clear that actually ended up being pre-filled because those don't end up getting rebid, as well as the kind of strategic decision to pull some direct barge and vessel shipments forward instead of trying to sell them in season, getting some of our certain commercial customers to take them a little bit earlier. So we had some volume shift into the September quarter as well. So those are the main drivers there.

Yeah. Thanks a lot.

The next question is from Seth Goldstein with Morningstar. Your line is open.

Hi. Good morning, everyone. Thank you for my question. I really appreciate the winter weather range guidance; it's extremely helpful. I have noticed that in the strong winter scenario, EBITDA per ton remained essentially the same compared to the upper end of guidance. Can you explain if there is any operating leverage that might result from strong winter weather and how you view that?

Yeah. If you look at the midpoint of the 2023 range on that slide, and I'll let George elaborate, it implies about $20 a metric ton of EBITDA. And you do see a $1 increase in the strong winter; you do see some benefit from absorption in a strong scenario. But George, maybe you can elaborate on the dynamics that drive perhaps even greater profitability in an extremely strong winter.

If I were to highlight specific operations, I would mention that our ability to scale up is significant, particularly at the Goderich mine. This winter has allowed us to increase production by several hundred thousand tons swiftly, without needing to hire more staff or invest in new equipment, which has been advantageous during this milder winter. We can also reduce our output based on adjustments in our labor and maintenance practices, giving us the flexibility to operate within that range.

Hi, Seth. One other point, I would just color for you. As you think about a strong winter, one of the reasons we don't have immediate leverage is by virtue of our contract structure, which is the customer has a 20% call option on anything over 100%. So, our price stays flat through 120%, and it's beyond the 120% is when we would begin to experience spot market conditions where that to occur. So, I think most of the leverage up to that 20% is on, as Lorin said and George, fixed cost absorption. Hopefully, that makes some sense.

That's really helpful. Thank you. And then, my other question is on plant nutrition. Can you walk through how should we think about the percent of production coming from the ponds versus MOP conversion, and how do you expect this to evolve in the future?

Yes. Look, I'll go ahead and jump on that one. Seth, this to George, again, I think maybe starting with that pond base versus what's actually coming out of KCL or MOP, that is something that we've undertaken for a period of time now for, I'd say, the last six to eight months. What we're trying to do is to actually look at the assets that we have and trying to look at what the sustainable tons will be coming out of that pond. There's no question of the impacts of the drought over the last couple of years have had an impact on our pond-based tons. But again, as long as it's economically viable, KCL will be added to achieve more, I'll call it, what I would call more historical type numbers coming out of the Ogden facility.

Regarding 2023, it's likely that less than 10% of the production will come from KCL.

Okay. That's really helpful. Thanks for taking my question.

Thank you, Seth.

We have no further questions at this time. I'll turn it over to Kevin Crutchfield for any closing comments.

We appreciate everybody joining our call today and look forward to keeping you updated in the coming quarters. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.