Better Choice Company Inc.

Good afternoon and welcome to the Better Choice 2024 Fourth Quarter Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Valter Pinto, Managing Director, KCSA Strategic Communications. Please go ahead.

Thank you, Operator, and welcome everyone to the Better Choice Company's fourth quarter and full year 2024 Financial Results Conference Call. Joining me today are Kent Cunningham, Chief Executive Officer, and Nina Martinez, Chief Financial Officer. The company's financial results press release has been posted to the Investor Relations section of the website and will be followed by a Form 10-K to be filed with the SEC on or before March 31st. Please note that remarks made today may include forward-looking statements subject to a variety of assumptions, risks, and uncertainties. The company's actual results may differ materially from those contemplated by such statements. For a more detailed discussion, please refer to the note regarding forward-looking statements in the company's earnings release and SEC filings. Also during the call today, we will discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP items to the most directly comparable GAAP financial measures will be provided by the company's financial results press release and made available on the investor section of the company's website. I'd now like to turn the call over to Ken Cunningham, our Chief Executive Officer. Please go ahead, Ken.

Thank you, Voltaire. And thank you everyone for joining us today to discuss our fourth quarter and full year 2024 financial and operating results. I'm joined on today's call by Nina Martinez, our Chief Financial Officer. I'll give a business review of 2024 and Nina will then cover our financials in more detail. I'm pleased to report that our business delivered a strong performance in 2024 as we made significant progress in our turnaround strategy to improve profitability, and lay the foundation for sustained profitable growth. For the full year, we delivered gross profit margin of 37%, representing an increase of over 600 basis points, and our adjusted EBITDA loss of approximately 1.9 million improved 78% year-over-year on annual net revenues of 35 million. Despite growing consumer uncertainty surrounding geopolitical and potential tariff impacts on the cost of everyday goods, The pet food category continues to show resiliency as pet ownership continues to increase and consumer spending continues to rise with the macro trends of pet humanization, premiumization, and wellness underpending industry growth. Halo continues to offer a unique brand position for the health conscious consumer seeking the best nutrition for their pets. The brand's performance is highlighted by an impressive fourth quarter revenue growth of 26% year over year. Our growth in the quarter was driven by 32% growth across Amazon and Chewy as we increased our focus and participation in Black Friday promotions across these platforms. This sales velocity is a key building block to revenue growth, but more importantly, long-term growth as we increased the number of new-to-brand or first-time consumers of Halo. As a result, we achieved our best quarter with Amazon since the first quarter of 2023. We also successfully launched Halo on Chewy Canada in November. These results give us increased confidence that our strategic shifts are working and that we can continue to build consumer demand for the Halo brand domestically and abroad. As the pet consumer continues to shift to e-commerce channels, we sharpened our strategy to ensure that we're top of mind when and where they're making their purchase decisions, offering the premium brand and benefits that highly engaged pet parents demand. We continued to improve adjusted EBITDA in 2024, reducing SG&A by 22% year over year. This was driven by consistent operational improvements throughout the year in our demand forecasting, resulting in an over 40% reduction in inventory while simultaneously improving service levels above 95%, and a 4% improvement in direct cost per pound as we achieved operational leverage and scale through international volumes, and work with our manufacturing partners to achieve favorable supply terms. Additionally, we've made continued progress reducing our short-term obligation. This, along with the 6.2 million gain from extinguishing debt and accounts payable, has positioned us to enter 2025 with a healthier balance sheet, including a working capital position of 7.9 million. We expect our financial health to fuel our continued top-line momentum as an increased emphasis on e-commerce platforms is expected to continue through 2025 and beyond. The generational shift in consumer buying habits continues to migrate online, and the overall expansion of e-commerce outpaces brick and mortar as pet parents increasingly turn to online retailers for convenience, selection, and value. As a 30-year pioneer in premium natural pet nutrition, the Halo brand has become globally recognized and is what a strong consumer following, especially in the fast-growing Asia markets. Therefore, subsequent to year end, we signed several important transactions to provide future value for our shareholders. First, we signed a definitive agreement to sell Halo Asia for $8.1 million in total gross proceeds, which includes $6.5 million in cash at closing, along with a 3% royalty on sales over the next five years, guaranteed by a minimum royalty payment of $330,000 per year or 1.65 million in total. We also agreed in principle to a 5.5% royalty agreement in Asia with our existing partner on all sales of the Halo Elevate brand. When we close, which is expected to occur by the end of April, we'll retain ownership of North American and rest of world ex-Asia operations. In addition, The Board of Directors has approved a royalty distribution plan of up to 55% of the annual royalties generated by the Halo brand to be distributed annually to stockholders of record as of December 31st of the given year. These unique transactions underscore our commitment to delivering long-term value to our shareholders from our Halo brand. These plans will provide a consistent return to shareholders and reward those who have invested and believe in our vision. Our momentum and optimism remains high as we enter 2025. We will continue to further explore opportunities to provide shareholder value, and we are confident in our ability to drive long-term profitable growth. Now, let me turn it over to Nina to take you through our financials in more detail.