Matt Crisp: Certainly. Well, the reduction from a previously published expectation of proprietary ingredients revenue of $350 million to revised $300 million or greater of proprietary revenues reflective of this more targeted strategy, and having reduced the expectation for some of the flour, flake, and lower margin oil product categories. So, that’s where it’s coming from. It obviously requires a still significant growth curve in order for us to meet those expectations, given the 2023 proprietary revenue guidance that we’ve just reviewed. But we’ve done a lot of modeling and we’ve looked very carefully at a lot of the demand side signals and contract pipeline and arrived in a bottoms-up manner to these numbers, such that we feel that, yes, it will take a continued amount of, in my mind, terrific execution and focus, but that’s an achievable goal, and it’s a goal that provides a product mix that meets our profitability targets.
Dean Freeman: Yes, let me just add to that. So, Kristen, this will be a key focal point in our Investor Day commentary and presentation materials, but largely, if you think about what we talked about at the last Investor Day, we talked about sort of the four-stack bridge to a margin expansion, and that is still very much intact. About 60% is sort of commercially-related, growth-related. 40% was more operational. I would say that, so given some of the cost dynamics we’re seeing, we’re actually anticipating most of the margin expansion improvement coming from strong growth in the proprietary side, as Matt mentioned. Other, both pricing and expansion of proprietary ingredients largely coming from Aqua and other sort of broader portfolio introductions that we expect to have over the next couple of years. But we’ll have a lot more to talk about that when we have our Investor Day.
Kristen Owen: Great. Thank you so much.
Operator: Thank you. Our next question is from the line of Cody Ross of UBS. Cody, your line is now open, if you’d like to proceed.
Cody Ross: Good morning. Thank you for taking our questions. If we go back to your initial guidance for 2022 proprietary revenue in the $70 million to $80 million range, what caused you to come in towards the lower end of that range? Is it what you just discussed about the higher fees for the farmers, or is it something else? Thank you.
Matt Crisp: For 2022, I’d say we came in the lower end of that range, in part due to timing. So, when we moved to the back half of the year, we did expect, as you might recall, a pretty steep climb into the late months of the year. And that was a manifestation of a lot of work that had been done to advance customers through a sales funnel starting the prior calendar period. So, I’d say that in part, that’s really just due to timing. It’s not a reflection of any lower quality of the pipeline. In fact, it’s quite robust. So, I think this is really more timing-related and customer commitment-related. There was arguably some delays, as Dean mentioned, due to supply chain challenges as well, but I don’t think that those had a material impact on the proprietary revenue recognition that we saw in fourth quarter. It’s just more how the pipeline is materializing and maturing.
Dean Freeman: And to say the least, Cody sort of a 50% year-over-year growth curve was aggressive, and we’re meeting that aggressive target. And so, to the extent that we sort of flatten the curve a little bit, as Matt mentioned, due to timing and just having a better understanding of sort of how the market will play out in 2023, we still feel obviously very pleased with the growth profile, both in 2023 and as we move forward.
Cody Ross: Thank you for that. And my follow-up question, Dean, this is more related to you. Did you say – did I hear correctly how much the interest expense would be reduced if you renegotiate your credit facility? Did you say 40 million?
Dean Freeman: I said 40%.
Cody Ross: 40%.
Dean Freeman: I might have said million.
Cody Ross: Yes, no, no, I was just confused, really.
Dean Freeman: Okay. It’s 40%.
Cody Ross: Got you. Okay. And then with that said, can you just elaborate on what is giving you the confidence that your interest rate would be reduced? I think your current interest rate is just under 6%. Thank you.
Dean Freeman: No, I mean, my current interest rate is prime plus 7% I think – or prime plus 5.25. So, that puts my current interest rate at about 13%, 14%. And so, we’re seeing a significant haircut. It’s a conventional lender. We’re able to demonstrate a cash flow profile, a cash generation capability that I think resonated from a credit perspective. And at the end of the day, the confidence I have right now is, we’ve got a term sheet and we signed a term sheet. Now, it’s non-binding, but we’ve got most of the terms conditions fairly well buttoned up.
Cody Ross: Thank you for that. I’ll pass it on.
Operator: Thank you. Our next question is from the line of Adam Samuelson of Goldman Sachs. Adam, please go ahead now. Your line is open.
Adam Samuelson: Yes, thank you. Good morning, everyone. So, I guess the first question, if we think about some of this, the conscious kind of shifts you’re taking to deemphasize some of the lower value products in the portfolio, can you just help us think about in 2022, what were the total harvested acres? What was the kind of functional protein composition of that production, and what that mix would look like in terms of total acres and protein kind of potential in 2023?
Matt Crisp: Yes, I mean, you can back into the – given the Investor Day 2022 disclosure where we talked about cumulative acres greater than 200,000 in the proprietary portfolio. I think you and others have backed into the math that last year we planted more than 100,000 acres, or contracted for more than 100,000 acres. That harvest was successful. The protein targets were consistently met. So, that’s very positive. As you see a shift towards more emphasis on ultra-high protein varieties constituting a larger ratio of what we’re contracting for, it’s fair to assume that you’ll see an ongoing portfolio shift to higher nutrient density. That’s certainly expected. We don’t measure, however, gross protein on a total basis. It’s just, I would assume, Adam, that you’ll continue to see, as we concentrate the portfolio to higher value products for the foreseeable future, that the ultra-high protein varieties will have a larger emphasis with our farmer partners.
Now, if we look past the next two to three years, I think it’s fair to assume that we should see – I’d be surprised if we didn’t see some softening in the commodity environment and some of the cost pressures that we’ve experienced in recent months and that we expect to continue to see over the next couple of years abate. And as such, I would be cautiously optimistic that after the next two to three years, we continue to grow some of the products that in today’s environment may be profit neutral or close to it, and be able to enhance and further grow the proprietary portfolio to create additional gross profit.
Adam Samuelson: Okay. And the point on the acres for 2023, and putting more around Decatur, leveraging the ADM partnership, does the acres that you’re kind of contemplating, are you including both the proprietary ones where you’re buying the end soy, or is that also including the ADM partnership acres? I just want a kind of definitional kind of clarification.
