Stryve Foods, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Stripe Foods first quarter fiscal 2023 financial results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Monday, May 15, 2023. Now, I would like to turn the call over to Sandy Martin, three-part advisors to make introductions and read the safe harbor statement. Please go ahead.

Thank you, operator, and welcome to the Strive Foods first quarter earnings conference call. With me today are Strive's chief executive officer, Chris Beaver, 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, that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements by their nature are uncertain and outside of the company's control. Actual results could differ materially 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 and they only refer to today. In addition, today's call will include a discussion of non-GAAP financial measures including adjusted EBITDA and adjusted EPS. Non-GAAP financial measures should be considered as a supplement to and not a substitute for GAAP financial measures. We refer you to the reconciliation of non-GAAP to the nearest GAAP measure included in today's earnings release for further detail. This call is being webcast and can be accessed through the audio link on the news and events page of the investor section at ir.strive.com. Also, the earnings press release is posted on our website. With that, I would now like to turn the call over to Chris Beaver. Chris?

Thank you, Sandy, and welcome, and thank you for joining us for our first quarter earnings call. We reported our 2022 year-end results a few weeks ago, where I detailed the progress of our transformation, the changes and improvements in strategy, Structure, process, culture, and capabilities are mostly in our rear view. We are now executing against the sizable opportunities in front of us, advancing into the next phase of our plan, growth, which leads to profitability. Special thanks to my STRIVE team members. Your commitment and efforts are appreciated and recognized. Since that earnings call, we have announced two important and meaningful accomplishments. First, the innovation launch for the Vacadillos brand, expanding our fast-growing lineup of carne seca with a new flavor, chipotle honey. We are also excited to be entering into the large and growing meat stick segment with the fastest-growing brand in the jerky segment, Vacadillos, introducing two terrific offerings, chili lime and habanero beef sticks. Bacadillo's air-dried sticks deliver important consumer benefits, higher grams of protein than the category leader, no sugar, no preservatives, only ingredients that consumers can pronounce, and they taste great. With these attributes, it's no surprise that we now have a total of three flavors of Carni-Seca and two beef sticks available at approximately 10,000 7-Eleven and Speedway locations across the country. That's about 80% of their footprint. Since the launch in mid-April, we are encouraged by the early indicators of the consumer response. The second announcement on April 20th was the capital raise of $4.1 million. This was action to support our near-term distribution growth, shipping in Q2, driven by innovative platforms and extensions, our Folds of Honor partnership on the Strive brand, our new brand positioning and packaging to complement our strategy along with investment and quality. The portfolio has been rationalized and optimized. Simultaneously, we created and are now implementing and executing the strategic imperatives. We have been aggressively managing costs, investments, cash, and more. Our performance management plan supports those objectives. goals, strategies, and metrics, and the organization is executing now as one team. Enterprise-wide alignment is a key component as we become a true operating company. I am very pleased about the response from our retail partners to our new category strategy, which is designed to expand and grow the category. Numerous distribution wins are being awarded across all classes of trade, I shared a slice of specific customer gains on the earnings release, those that are already in market. Numerous more have been awarded and momentum is very encouraging. We will update as additional retailers add new and or expand existing items to the category once they are physically in store. The proof points outlined for growth are real and meaningful. The opportunities are abundant. We will have many more to communicate throughout the quarter and beyond. The new strategy is working, and we are just getting started. We are focused on driving trial with strategic pricing, quality merchandising, in-store execution, labor-saving, retail-ready case packs, complimentary marketing messages, and display vehicles to include cause marketing initiatives with folds of honor patriotic pack. We have built the foundation and we have proven that we are focused on building a great company that is maniacally managing costs, driving productivity, improving cash consumption, expanding margins, investing for return, and growing in a manner that will deliver profitability. Thrive 2.0 is addressing everything we do and how we do it. You are starting to see the impact the changes are having in the numbers. Our thoughtful and planned approach to growth combined with the operational improvement is our recipe for success. The foundation we have built in just a few quarters demonstrates that our simplified, prioritized agenda, sequenced and executed was what was and is required to drive value to all stakeholders. We expect to grow at a rate well above the meat snack category with accelerating consumption, ultimately earning gains in market share. We will not grow at all costs. We are partnering with retailers collaboratively to help them compete and grow their share. We will expand margins with operational improvements. We will keep costs down and we are committed to deliver a profitable, innovative, growing company with the very best tasting, better for you offering this category has ever seen. As we have previously shared, we have adopted a zero waste mantra. We now have several value generating initiatives where the team has discovered and implemented ways to eliminate and monetize the waste, providing solutions that enhance our economic outcomes and environmental impact. In addition to Two Tails pet treats, we are now selling shelf-stable protein ingredients to manufacturers of Meals Ready to Eat kits, or MRE kits. Both of these initiatives are supporting proof points that the new STRIVE delivers against our commitments. Later this month marks my first year with STRIVE. I had been a part of a successful turnaround and have learned what is required to become a true operating company. The speed that we have progressed and are executing on cost and cash management, productivity, combined with optimizing the portfolio, which has included rationalization, renovation, and innovation, has been truly impressive. We are delivering on each and everything I said we would since I started and outlined our new strategy. We continue to set new records for the company performance, and we have demonstrated that we will deliver on our commitment. Our first quarter was our third consecutive quarter of improved year-over-year operational and financial results with narrow losses and improved adjusted EBITDA. We are reaffirming our net sales guidance for 2023 in a range of $28 million to $34 million. We will keep you informed as we accelerate performance and share the many more proof points that are in our future.