Stryve Foods, Inc.

Good afternoon. Thank you for standing by and welcome to the fourth quarter and full year 2021 conference call and webcast for Strive Foods, Inc. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the call over to Austin Key, General Counsel, to begin.

Thank you, Operator, and thank you all for joining us. With me are STRIVE Chief Executive Officer and Co-Founder Joe Oblos and Chief Financial Officer Alex Hawkins. Before we begin, I would like to remind everyone that part of our discussion today will include forward-looking statements, which are based on our current expectations of future performance. Our actual results could differ substantially from these expectations. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We do not undertake to update these forward-looking statements at a later date. We refer you to today's shareholder report and the SEC filings filed by Stripe Foods, Inc. for a more detailed discussion of the risk that could impact future operating results and financial condition. In addition, today's call will also include a discussion of non-GAAP financial measures such as EBITDA. Non-GAAP financial measures should be considered as a supplement to and not a substitute for GAAP financial measures, such as net income and net loss. We refer you to the reconciliation of the non-GAAP measures to the nearest GAAP measure included in today's shareholder report for further detail. I would now like to turn the call over to Strive Chief Executive Officer and Co-Founder, Joe Oblos.

Thank you, Austin, and good afternoon, everyone. Before I give a brief introduction to Q4 2021 and the full year 2021 results, I want to explain the new STRIVE quarterly shareholder letter you received today at market close. Going forward, we'll be sharing our results in this shareholder letter format, which is designed to give you a full view of the STRIVE quarterly financial results, forecasts, and strategic milestones. Moving forward, our plan is to release the shareholder letter at market close after each quarter. The following morning, we will hold a conference call giving you plenty of time to review And so we can primarily focus on the Q&A. As much as we know you like to hear us talk, we know you'd prefer to spend most of the time asking questions. Since we had already announced our earnings call for Q4 this afternoon, we had to release the shareholder letter right before the call, and as such, apologize for not giving you much time to review. If you do not have the shareholder letter, you can download it at the Investors tab located at the bottom of our website, strive.com. As mentioned above, for Q2, we will definitely give you more time. Now to the highlights of the letter, Q4 and 2021. The irony behind the STRIVE story is that we have essentially created and are leading a new U.S. meat snack category with a product that has been perfected and consumed for over 500 years. While people throughout the world long ago learned that hanging and drying meat in the open air is the best way to preserve it, Americans, it turns out, are loving it now too. It's better late than never, and it's better to be a first mover in creating a well-defended category. According to SPINS, our first mover investments have earned us approximately a 90% market share of this new U.S. meat snack subcategory of air-dried beef in which our Biltong and Carne Seca brands participate. According to Statista, the healthy snacking market is expected to reach $110 billion this year, of which approximately $5 billion will comprise meat snacks. The highlights are as follows. Number one, we are the first company to establish a large, scalable, U.S.-based air-dried meat snack manufacturing facility to be licensed by the USDA. Two, our highly competitive nutritional profile is achieved through 100% natural ingredients, never frozen beef, natural spices and vinegar, resulting in products that pack up to 16 grams of protein per ounce, and generally contain zero grams of sugar and no carbs. Three, we're bringing in new participants to the meat snack category, including women and those who the jerky category wasn't relevant to. Four, Strive has either begun or will begin distribution in 2022 across all top 10 grocers in the U.S. and seven of the top 10 convenience store chains. Key things to focus on in the letter is our announcement launching chain-wide with the world's leading natural and organic foods retailer with more than 510 stores in the U.S. Five, Strive product innovation with the introduction of built-on slabs and the addition of meat snack sticks to the Vodka Dios product line and the continued initial development and expansion of our Strive nutrition brand. All of these factors are fueling impressive in-store velocities. According to SPIN, for the 12-week trailing period as of February 20th, our Bacadios brand experienced a 401% increase in dollar velocity within C-Stores. What's particularly amazing is the broad acceptance of Strive products across an incredibly diverse distribution ecosystem. Our products can be and are sold just about everywhere. sports arenas, colleges, airports, farm and tractor stores, club convenience stores, supermarkets, truck stops, et cetera. In addition to recently adding the world's leading natural and organic foods retailer, our burgeoning partnership with Costco is expanding and plays into our forecast and guidance outlined in the shareholder letter. Our top line revenue increased by nearly 77% to 30.1 million in 2021, as we benefited from a full year of contributions from our DTC e-commerce sales platform, increased sales to existing wholesale and private label accounts, and generated net new sales from additional distribution wins at a number of key retailers in the club, mass, grocery, and convenience channel. Importantly, besides new and expanded distribution, We attribute the growth in the wholesale channel in part to higher sell-through velocities of products supported by increased foot traffic following an easing of pandemic-related restrictions. For Q4, our net sales increased to 6.8 million, representing 71.3% growth year-over-year. Strong wholesale gains contributed to 54.4% of net sales, increasing 254.6% year-over-year. including significant new year-over-year distribution across most channels with a particularly strong lift coming from convenience and club. Like most businesses today, during 2021, Strive faced pervasive industry challenges affecting supply chain, labor, and transportation. These factors negatively impacted net sales performance in the second half of 2021. Throughout the second half, we experienced significant cost pressure related to both labor and commodity cost increases. While our gross margin showed resilience through the first three quarters of 2021, our annual gross margin decreased slightly to 34.1% from 34.7%. However, due to top line sales growth, gross profit increased 4.5 million from 5.9 million to 10.3 million. While we expect continued volatility in the beef commodity markets, we are seeing a welcome drop in the price of beef from the highs seen in Q3 of 2021, with current prices down between 15 and 20% for some cuts. With that, I'd like to turn the call over to Alex to walk through our Q4 and full year 2021 highlights, as well as our 2022 outlook.