NewAge, Inc.

Good afternoon and welcome to New Age Incorporated third quarter 2021 earnings conference call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, today's conference is being recorded. I would now like to turn the conference over to Lisa Mueller, New Age Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and thank you all for joining us today to discuss New Age's third quarter 2021 financial results. I'm here today with Brent Willis, Chief Executive Officer of New Age, and Kevin Banyan, Chief Financial Officer. On today's call, Brent will provide an overview of the operations and progress against our strategic initiative, and then Kevin will provide a summary of our financial performance before we open it up to analyst questions. I'd like to remind everyone that this conference call may contain forward-looking statements reflecting management's current expectations regarding future results of operations, economic performance, financial conditions, and achievements of the company. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties. Factors that could cause these results to differ materially are set forth in our annual report on Form 10-K, and an R10Q filed with the SEC. Any forward-looking statements that we make on this call are based on our assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and 10Q, which are available on our website at newage.com. I'd now like to turn the call over to Brent Willis, our Chief Executive Officer. Brent?

Thank you, Lisa. And as an aside, I am so excited that you're a part of the company and excited about the contributions you're going to be making for both the company and for our shareholders. So good afternoon, everybody, and thank you to everyone for joining the call today. On today's call, I'd like you to give you some insight into progress against our major strategic priorities. provide perspective on our overall performance in the quarter, and highlight some of our major drivers of our results going forward. And then Kevin is going to take you through the quarterly financials. First, let me start off with a review of the quarter. Revenue increased 59% year-over-year to $100 million. Gross margin improved six full points to 66.3%. And adjusted EBITDA also improved by almost 50% versus last year. And achieving these results in the context of everything going on in the world while we are in the midst of acquisition integration and all of its associated complexities is not easy. Not only that, because we are managing our business to deliver sustainable and consistently growing EBITDA over time, we have had to make some decisions that may impact our results in the short term. but which are essential to building our foundation and providing a springboard for growth. And in the third quarter, we made some of those decisions for the long term, especially in the upgrade and integration of our systems across all partner companies, making a number of cost reductions to improve SG&A as a percentage of net sales and further integration of our operations. We made these decisions. for the long-term health of our company, but they did have a short-term impact in Q3. For example, the one time system integration had a negative impact on revenue. Also in the third quarter, our China business was negatively impacted by the industry changes enacted by the PRC government, and Japan continued to feel the effects of the government sanction from last year. On the flip side, We saw good growth in a number of geographies around the world as these markets began to get back to work following COVID shutdowns. We overcame many of the complexities in the quarter as evidenced by improvement in our key indicators. Our monthly auto ship subscribers increased 15% versus the prior quarter and average order size was 6% higher. And the reason we track these key metrics across all of our markets, really on a day-to-day basis, is because they are the leading indicators of revenue in the coming months. And for the most part, these indicators are all improving and moving in the right direction. So looking ahead, we believe the systems upgrade and most of the merger integration items that impacted the top line in the quarter are one time in nature and largely behind us. but we still have a few open items to complete. We are, however, encouraged by improving top-line growth trends in the fourth quarter. Underlying demand is strong, evidenced by the metrics of our brand partners, and we anticipate sequential organic growth in Q4 in the high single digits. We remain focused on what we can control, delivering on our promise to all stakeholders to drive growth and to do so profitably. While our supply chain remains strong, and we've had no major out-of-stocks, our lead times and costs on many of our raw materials, production, and shipping have all increased, like virtually every other CPG company in the world. Kudos to our operations team, however, who have managed through the complexities like chance. As a result, though, we have had to hold higher inventory than planned, and this has a cash cost to us, but our redundancies that we have built into our supply chain are proving to be robust. But when we look at 2022, these actions are going to be even more critical, as we don't expect the global supply chain complexities to diminish. We're also harmonizing our manufacturing and logistics footprint globally, which led to the closing of our Mainz, Germany, European warehousing and establishing more operations locally in both the Netherlands and Italy. This has reduced our cost and improved our ability to serve our customers on a more local and locally centric basis. All these actions together have helped us improve our gross margin a full six points versus last year. This is the end result of all of those actions and reduced SG&A as a percent of net sales that Kevin will discuss. Now these priorities are component parts of methodically growing profitability and capitalizing on the underlying trends that will propel our business forward. These are mega trends like consumers' pursuit of health and wellness worldwide and the demand for healthy, clean products. Our R&D team has been relentless in developing a pipeline of healthy, functionally differentiated brands that are as efficacious as they are safe. and many of which have important benefits that, frankly, approach the boundaries and historical turf of big pharma. For example, our scientists discovered that our Tahitian noni juice inhibits the ability of spike proteins to bind to human cells, adding to the long list of health benefits guarded from this incredible superfruit. And we're excited to have recently launched Our Lucem eyelash volumizer and natural lip plumper also developed 100% in-house, tapping into the growth segments within the healthy appearance category. These products were just rolled out to our North American brand partners and the initial inventory sold out within hours. We think we're just getting started in our business model with our aggregated base of influencers. We continue to invest in technology enhancements such that our brand partners can use social selling seamlessly and develop multiple revenue streams. And we are continually rolling out new tools and tech to help them expand their businesses. And speaking of expansion, we just opened up the southern cone of Africa and will be expanding in many of the surrounding markets beginning in the fourth quarter. We are running the business for the long term to benefit all of our many different stakeholders, our investors, of course, but also our associates, our brand partners, customers, suppliers, and the communities we serve worldwide. We are working towards the same goal, making this transformation to become the leading social selling and distribution company in the world. It's not built overnight. but we think we have a world-class team, recently bolstered by the additions of Jen Grafton as our new general counsel, Lisa Muller as our new head of investor relations, and Karina McDaniel, who was promoted internally to become our chief marketing officer. We also will be evolving our board as we progress to the next level. I want to personally thank Tim Haas, who recently announced his retirement after four years of dedicated service to the company. Tim was a great and values-centric leader for our company, and he and I have personally known each other for over 20 years since he was my boss at the Coca-Cola company. He's now 75, and we have had just about enough of each other. He will be sorely missed, however, both personally and professionally, but deserves all the credit in the world as a fantastic end tough board member as a leader and as a personal mentor. Personally, Tim, thank you. As we evolve our board and as we strengthen our leadership team and team of dedicated and impassioned brand partners, we have a tremendous amount of confidence with an increasingly clear line of sight to achieving our financial objectives. Increasingly strong commitment to making a difference for the planet with healthy products, and increasing belief in our unencumbered opportunity to become the leading social selling and distribution company in the world. And with that, I'll now turn it over to Kevin to review our third quarter results in more detail. Kevin?