Advantage Solutions Inc.

Greetings and welcome to the Advantage Solutions second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. If anyone should require operator assistance during the conference, please press star 0. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ruben Mea, Vice President of Investor Relations. Thank you, Ruben. You may begin.

Thank you, Operator, and thank you for joining us on Advantage Solutions' second quarter earnings conference call. Dave Peacock, Chief Executive Officer, Chris Grohe, Chief Financial Officer, and Sean Chosky, Senior Vice President of Strategy and M&A, are on the call today. Dave and Chris will provide their prepared remarks, after which we will open the call for a question-and-answer session. During this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and involve assumptions, risks, and uncertainties that are difficult to predict. It is important to note that actual outcomes and results could differ materially due to several factors, including those described more fully in the company's annual report on Form 10-K filed with the SEC. All forward-looking statements are expressly qualified in their entirety by such factors. The company does not undertake any duty to update or revise any forward-looking statements except as required by law. We want to draw your attention to the fact that our remarks today will focus on certain non-GAAP financial measures. Our earnings release issued earlier today provides a reconciliation of these non-GAAP financial measures to the most comparable GAAP measure. This call is being webcast, and a recording will also be available on the company's investor relations website. We will also refer to a presentation during the prepared remarks, which can be found in the events and presentation section of the IR website. We filed an 8K this morning with a recast of revenues and adjusted EBITDA over the last 10 quarters for the new segments. This includes revenues, net of pass-through costs, and adjusted EBITDA on a continuing operations and discontinued operations basis. Finally, unless otherwise stated, the financial results discussed today will be from continuing operations. And now I'd like to turn the call over to Advantage's CEO, Dave Peacock.

Thanks, Ruben, and thank you all for joining us this morning. I first want to acknowledge our teammates for their hard work during the second quarter in a dynamic environment across CPG companies and retailers. Revenues on an organic basis, excluding pass-through costs, increased approximately 1% to $750 million, and adjusted EBITDA was $90 million, with margins of 12%. At the same time, we continue to advance the strategic initiatives that are driving our transformation to reset the bar as the premier conduit for consumer brands and retailers that keep commerce and life moving. These initiatives already yield benefits and will continue to do so through our phases of execution over the next two years. Over the last 18 months, we have refined Advantage's portfolio to sharpen our focus on the areas where we have a right to win and centralized our corporate functions to drive consistency and efficiency across the enterprise. We are happy to report that we have largely completed the simplification portion of our transformation. This culminated with the recent sale of the June Group at the end of July, marking more than 10 largely non-core business divestitures. Most of the proceeds will be used to pay down debt as we target a net leverage ratio of three and a half times or less over the long term. We are midway through our corporate transformation, moving from a fragmented set of businesses focused on their unique service offerings to an integrated enterprise under one umbrella with interconnected service offerings and solutions. During the second quarter, we advanced several initiatives, including upgrading our technology data platforms and recently launching our own AI core competency center to better serve clients in areas such as contract management and routing merchandisers, as well as those that serve internal needs, like HR workflow and certain analysis of large data sets. Our simplification and enhancements will give teammates the tools to work smarter, faster, and achieve more. Advantage's culture is centered on putting people first, which is why we have enduring relationships that result in approximately 95% retention over time among our top 100 clients and inspire the performance that has made us one of Time Magazine's best midsize companies. Last quarter, we announced Advantage's new reporting segments, Branded, Retailer, and Experiential Services. which are linked more to the customer than service activity, across a network of over 4,000 clients and nearly all of the top retailers. We believe this structure provides a clearer picture of our business and the drivers of financial performance. I want to share how we see those segments evolving because of the transformation. Let's start with branded services, where we serve as an extension of consumer packaged goods companies' sales and marketing teams. Our primary areas of support to CPGs include selling to retailers not directly serviced by a CPG, including joint business planning, price promotion planning, and category reviews. Retail merchandising for CPG clients to ensure on-shelf availability, the right displays, and accurate pricing. And omni-channel services where we can manage fully integrated market programs, including retail media campaigns to connect consumers with brands. Within this segment, our business intelligence capabilities are the foundation of our brand and retail execution. With the investments we are making, our intel will become a more meaningful differentiator driving all the activities across our business, including where we send our teams and how we sell to retailers. Our real-time insights take our client service to the next level, informing everything from shelf resets to how and where we sample. Our investments in technology are already bringing more speed and precision to the solutions we offer CPG clients through the mountain of proprietary insights we gather. For example, we're collaborating with a retail technology company specializing in image recognition and AI to provide high-speed analytics on inventory tracking. In seconds, we can turn real-time insights into action to improve brand and retail execution, where a similar process would take days with other providers. The insights and execution we offer allow us to help clients with their existing products, line extensions, and innovations. We announced a collaboration with LA Libations, a company with emerging and insurgent brands hungry for our expertise. Our collaboration will help get those growth brands onto more shelves and into more retailers nationwide, allowing them to scale faster than ever before. Moving on to our experiential services segment, which directly connects shoppers with brands through in-store and online sampling experiences, live events, and digital engagements. Our scale and global leadership position gives us a clear competitive advantage. We are expanding this advantage into new and emerging channels and beyond brick and mortar. Whether it's grocery, mass, or wholesale, our studies show that approximately 85% of shoppers indicate sampling impacts their purchase decision, with approximately 65% making a purchase the same day or later. Shoppers who engage in sampling can increase buy rates in units and dollars while spending up to three times more after sampling events. Our digital sampling capabilities are another way we help clients generate consumer demand. Clients are looking for omnichannel marketing solutions as part of their overall strategy. We are proud to have recently received Amazon's inaugural Gold Tier Award for Excellence in Omnichannel Performance. Not only are we growing our business directly with Amazon, but we also collaborate extensively with the online retailer, serving brands through branded services to help deliver shopper-centric solutions that enabled all of our CPG clients to realize double-digit growth in the last year. As part of our interconnected offerings, omnichannel services are also vital to each of our business segments. Lastly, retailer services provides end-to-end offerings from private brand strategy to optimizing aisle and shelf spaces to providing retail media network support. We have enduring relationships with most of the largest North American retailers, serving more than 100,000 stores annually. Our teams address our clients' most important matters, such as ensuring products are stocked and positioned on shelves and displays to inspire purchases and enable growth. Our investments in technology will reduce the time needed to diagnose out-of-stock and shelf gaps, while freeing up more time to capitalize on new off-shelf opportunities that command shoppers' attention and convert them into buyers. Just last week, we announced a new strategic collaboration with technology company Swiftly. Swiftly works with brands and retailers to connect shoppers with targeted promotions, rebates, and ads on their mobile devices. Adding this new capability will allow us to offer our retailers scalable and targeted solutions that put brands in front of new audiences and drive more people to stores. Finally, we are best positioned with retailers today and into the future to drive private brand strategy and development, delivering quality and value to the shoppers. Our differentiation helps us understand the entire category for a retailer and CPG, including both branded and private brand dynamics. By further enhancing our competitive advantages, we will leverage our unique position to shape how consumers shop across the entire path to purchase. We expect our evolution to expand our reach and create a more seamless experience for brands and retailers to utilize our collective service offerings. Now, let's turn to our outlook. As we look to the second half of the year, we expect improved performance while acknowledging that the markets remain uncertain across portions of our business. The seasonality favors this time of year, and we are seeing increased activity for our services. In addition, new business wins from earlier in the year will begin to contribute, especially in experiential services. We are at a point in our transformation where we are aligning the unified organization with our business priorities to fuel long-term profitable growth. We expect these efforts to begin delivering financial benefits in the back half of this year and beyond. These actions include right-sizing talent resources across the enterprise, most notably in branded services, advancing our strategic collaborations such as GenPact and TCS, moving from implementation and upfront investment to executing and realizing efficiency improvements, realizing additional opportunities to reduce overhead costs, such as leased office space after completing the business portfolio rationalization. As the industry continues to deal with wage inflation, we secured additional price increases to help offset the expected impact in the year's second half. In conclusion, we are energized by the progress of our strategic initiatives to transform this business. We are doing this by focusing on our core capabilities, operating with excellence, strengthening our balance sheet, and investing in leading edge technologies and talent. This strategic approach will enable us to provide our clients with high touch, high tech, and high value services. The beneficiaries of our transformation will be our clients, who will work with an even more responsive, insights-driven organization. our teammates, who will be more empowered to represent Advantage and build more successful careers with us, and our shareholders as we realize our full potential. With that, I will now pass the call over to Chris to review our financial performance.