Celsius Holdings, Inc.

Hey, ladies and gentlemen, and welcome to the Celsius second quarter 2023 earnings call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Cameron Donahue, Investor Relations for Celsius.

Thank you, and good afternoon, everyone. We appreciate you joining us today for Celsius Holdings' second quarter 2023 earnings conference call. Joining me on the call today are John Fieldley, President and Chief Executive Officer, and Jared Langens, Chief Financial Officer. Following the prepared remarks, we'll open the call to your questions, and instructions will be given at that time. The company released the earnings press release earlier this afternoon, and all materials will be available on the company's website, CelsiusHoldingsInc.com. As a reminder, before you turn the call over to John, an audio replay will be available later today and can be accessed with the same live webcast link and our conference call announcement press release. Please also be aware that this call may contain forward-looking statements, which are based on forecasts, expectations, and other information available to management as of August 8, 2023. These statements involve numerous risks and uncertainties, including many that are beyond the company's control. Except to the extent as required by law, Celsius Holdings undertakes no obligation and disclaims any duty to update any of these forward-looking statements. We encourage you to review and follow our safe harbor statements contained in today's press release and our quarterly findings with the SEC for additional information. With that, I'd like to turn the call over to President and Chief Executive Officer John Fieldley for his prepared remarks. John?

Thank you, Cameron. Good afternoon, everyone. We thank you for joining us today. On our first quarter call, I highlighted that it was the first quarter in company history to exceed $200 million in sales. Today, I highlight for the first time in company history, we have achieved over 300 million in a single quarter. Our record sales in the second quarter totaled approximately 326 million, an increase of 112% from last year's second quarter of approximately 154 million. In our North America business, revenue increased 114% for the quarter to $311 million, up from $145 million in the prior year's second quarter. Celsius continues to be the top driver of growth within the energy category, both in dollars and unit growth. In total, U.S. MULOC energy for the last 52 weeks, ending June 18, 2023, contributing over $665 million in incremental retail sales, or 23% of the category growth, and 204 million in incremental units, representing 35% of the category growth. Per IRI, in the four weeks ending as of June 18, 2023, in MULOC total energy, Celsius maintains the number three energy drink brand in the United States representing a new market share record in the company history in the category of 8.6 percent doubling its market share of 4.3 percent and a year ago period we continue to see growth across all channels both tracked and non-tracked with our club channel sales hitting another quarterly record of approximately 68 million for the quarter ending June 30th 2023 up 120% approximately compared to 31 million in the second quarter of 2022. Second quarter channel sales also exceeded our first quarter sales by approximately 20 million, which was driven by a full roll-up of our second new pack size of our Vibe Energy pack going into Sam's Club and the first full quarter of our national rollout within BJ's. We also just hit a new record on Amazon with over $28 million in sales, up 108% from the prior period second quarter revenue of $14 million approximately. Celsius maintains its position as the second largest energy drink brand with approximately an 18.6 share of the energy category as of the last 14 weeks period ending June 30th, 2023 per stock line energy drink category data total US on Amazon. In addition, we continue to expand growth opportunities in non-track food service channels and are gaining more distributions in colleges, universities, hospitals, hotels, eateries, casinos, and more. Overall, food service represented and exceeds approximately 11% of our PepsiCo revenues, and we see this as an area of growth and scale in the future. We have been extremely happy happy with our PepsiCo partnership and see a long runway of growth ahead across a variety of channels, including expanded retail convenience and food service. As highlighted in our earnings supplements for the four week period ending per iri spins total energy data and in June 18 2023. As stated in MULOC, Celsius maintains the number three energy drink position in the U.S. and now has an 8.6 market share, which doubled from the prior year share of 4.3. In addition, according to MULOC, Celsius grew its ACV to a record of 96.8% for 79.8% in the year ago period, which is a tremendous achievement by our teams and our partner with PepsiCo. And in addition, in convenience, Celsius has gained an additional 31.9 points of ACV growth versus the prior year ending period and resides at a 94.9% ACV compared to 62.9% of ACV in the prior year. This provides a tremendous amount of opportunity as we continue to gain greater availability across the country and in addition, as we continue to build greater awareness with our consumers. international sales grew 76 percent in the second quarter totaling 15.1 million compared to 8.6 million in the second quarter of 2022. we believe that there is a significant opportunity for incremental growth going forward with pepsico over the next three to five years although earlier in the in in a process we are mapping out and roll out plans and continue to have discussions with our partners and opportunities for 2024 and beyond While the U.S. transition has taken the majority of our focus today, we do expect to announce additional international expansion opportunities and plans in the future. With that said, we continue to work towards early 2024 for some opportunities to roll out internationally, with 2023 being a year of planning around logistics, production, distribution, etc. The goal will be to create a blueprint in a handful of countries in which in 2024 for further expansion within 2025 and 2026. We'll provide additional details as we continue to get closer to those dates. Beyond new markets, we're very excited about a number of innovations that our team has been working on throughout the year. We hope to launch some initial exciting launch plans in 2024 and beyond, and we'll provide additional insight as we get closer to those launch dates. The company achieved a record non-GAAP adjusted EBITDA of 78.1 million in the second quarter, representing approximately 24% of sales. This was driven by gross margin improvements by over 1,000 basis points from the year-ago period to 48.8%, up from 38.5%. In addition, we saw continued leverage across our sales and marketing with a total of approximately 19.2% of sales in the second quarter compared to 21.1% in the prior year. This leverage was more of a product of accelerated sales as we did increase our spend in the second quarter as we outlined in our first quarter call. In addition, we have seen some savings as we have rolled out slower pace against our headcount resulting in our initial budgeted expectations. We will look to add additional headcounts across the back half of 2023. Jared will walk you through in more detail some expectations around this area. Celsius was the leader in unit growth over the last 12 weeks and in June 18, 2023, per IRI for the entire beverage category, contributing over 17% of unit growth in LRB, which is liquid, total liquid refrigerator beverages. As the company continues to gain new consumers, we believe they are unique to the energy category, which further increases the value of each of our customers. With this proximity equal mix of male and female customers, the average age demographic is 18 to 45 plus. We are expanding the energy category with expanded consumer base and usage occasions. The Celsius consumer making it a daily part of their active lifestyle and with consumption patterns that are similar to coffee than traditional impulse purchases with legacy energy drink brands. To close my prepared remarks, both on a dollar and unit growth, Celsius is the industry leading in the category with tracked channels showing acceleration year over year. Our customer is unique, expanding the category to new consumers while they're increasing their dollar spend on Celsius. This is even further evident by our record sales in the Club channel and on Amazon, as well as the rapid growth in ACV expansion we've seen in reported in MULOC. With our top line growth, of 112% for the quarter, we saw over approximately 400% growth in operating income, showing the leverage in our operating model to drive further shareholder value. I will now turn the call over to Jared Langrens, our Chief Financial Officer, for his prepared remarks. Jared.