Bobby Burleson: Yeah, good morning. So just curious on the top line guidance kind of parsing out the full year benefit of price increases versus kind of volume expectations, what do you kind of — what’s implied in terms of volume directionally versus 2022 from a growth perspective?
Michael Franklin: Hey Bobby. Good morning, we expect growth to be, I guess, I’ll call it more balanced than we saw in 2022. From a Branded CPG perspective, most of the growth was price. I would say 2023, most will be price, it just won’t be as acute. Now one of the things we do have in our expectation set is a little bit more SKU rationalization, particularly as it relates to our Ingredient business on Wholesome. So that business may decline just a little bit. That’s by choice, given where sugar prices are and what our sugar quota is. So absent that dynamic, we expect more volume growth than we saw in 2022. But we’ve got a little bit of price to go full year effect plus some pricing that we’re actually factoring on now, but expect volume growth to be maybe two-ish times what we saw in 2022.
And Flavors & Ingredients a little different dynamic there, great volume growth obviously in 2022. We do expect both positive price and positive volume in our Flavors & Ingredients, but that will be slightly more weighted towards price in 2023.
Bobby Burleson: Okay, great. And then just on the Erythritol, I understand there’s some — you guys have out there said kind of highlight Erythritol not just as an ingredient in the back, but really blazing on the front of the package. Curious kind of what the costs might be or timing around repackaging, if that’s necessary, like whether or not customers or partners are interested in maybe a different way of presenting those products that don’t highlight Erythritol on the front, just curious what the operational impact might be in terms of any costs or timing there of making those changes if in fact, there’s interest in doing that?
Michael Franklin: Yes, thanks Bobby. Look, I think for us, right, I think we’ll continue to monitor how the recent press translates to consumer demand. I think for us, what we see is — it’s not any different than any product that we sell, right. And any — receive on any product that anyone sells. For us, it’s making sure that we have the action plans in place to make the changes that we need. If we need to reform the products, we’re working obviously to make sure that we can do that, and we’ll have the backups in place and repackaging if that’s what we ultimately need. But the truth is today where we are, we continue to have strong conviction in our products and there’s nothing that’s happening or changing overnight. But like any business and you’re managing risk, you’re making sure that you have the plans in place.
But no, for us, we can do this relatively quickly with any of our products. And we go through this with all of our SKUs, not just ones that have Erythritol.
Bobby Burleson: Okay, fantastic. Thank you.
Operator: Our next question comes from the line of Scott Mushkin with R5 Capital. Please proceed with your questions.
Scott Mushkin: Hey guys, thanks for taking my questions. So, it seems and I know Michael, you’re still thought as the Interim CEO, but the way you kind of addressed the call, it seems like it’s more permanent. So how are we viewing that?
Michael Franklin: Hey Scott, thanks for the question. So, from my perspective when I had the opportunity, obviously, as we talked about to join the Board in August and ultimately join in a full-time role obviously at the beginning of January, I think for me, I had — when I had stepped into this role, the idea was asking for the Interim title was to reserve the ability to make sure that I was the right person. I want to make sure that the team felt like I was the right person and that the Board felt similarly to make sure that I was the right person to lead the company. I think from initially from out of the gate, I took the role knowing that I might be doing this, that I plan on doing this full time and the Interim title was only temporary.
My full intention is to be here for the long term, the more time, like I said, spending with the team, the more excited I am about what the future holds, and I’m looking forward to being part of the team on that journey. So for me, this is — I’m here for the long term, and I’m excited about the future prospects of this business.
Scott Mushkin: Great. And then this question is actually, I think, probably more for Duane. When we look at your — and you laid out the first quarter being lowest EBITDA. As we look at the other side of the ledger, the cash needs of the business, how should we think about that same way and how significant do you think it will be in the first quarter and then maybe lay out the year?
Duane Portwood: Scott, I appreciate the question and good morning. No, I think that — my first year with the company was obviously a very dynamic year. Lots going on operationally, lots going on organizationally and the like and operationally as well. I would say this from a cash needs perspective and a net working capital perspective, I don’t expect working capital to be a source of funds for the full year. I think where we’re at, as we exited 2022, we’re actually in a pretty healthy position, both in terms of inventory. We made good strides in Q4 in bringing some of that — some of that down and kind of what remains in inventory at the end of 2022 is more of the cost impact that we saw throughout the year. So based on what we know about costs right now, I think most of that is kind of woven its way into the balance sheet.
So that shouldn’t have as dramatic of an impact. We’re very healthy from a vendor perspective and our relations there and our payables balances and our receivables are in a good spot. So I would say we’re starting 2023, probably not as hungry as we were in 2022 from a net working capital perspective. So as we — it will be lumpy as we go through the year. I actually don’t see Q1. There are some puts and takes, but I don’t expect huge movements in working capital in Q1. Q2 and Q3, there might be a little bit more of an appetite just given timing on some sugar type purchases and the like. And then as we finish the year, again, I would expect a kind of single-digit millions use of cash overall in net working capital given our growth. But I don’t expect the massive kind of fluctuations that we saw in 2022 overall as the year progresses.
Scott Mushkin: Perfect. And then my final question would be, as you look at your EBITDA guidance, let’s kind of walk us through the idea of what could take you above that and what could maybe take you below it and kind of as you guys look at the year?
