Hostess Brands, Inc.

Ladies and gentlemen and welcome to OCS Brands Inc first quarter of 2022 earnings conference call. At this time all participants are in listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require assistance during the conference please press star on your telephone keypad. As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Mr. Amit Sharma, VP of Investor Relations.

Good afternoon and welcome to Hostess Brand's first quarter 2022 earnings conference call. Joining me today on the call is Andy Callahan, Hostess Brand's President and CEO, and Mike Jernigan, Chief Accounting Officer and Interim CFO. By now, everyone should have access to the earnings release for the period ending March 31st. 2022 that was published at approximately 4 p.m. Eastern time. The press release and investor presentation are available on Hostess' website at www.hostessbrands.com. This call is being webcast and the replay will be available on the company's website. During the course of this call, management will make a number of forward-looking statements, including expectations and assumptions regarding the company's future performance. The company's actual results may differ materially from these forward-looking statements, and the company undertakes no obligation to update or revise these forward-looking statements. A detailed list of these risks and uncertainties can be found in today's earnings release and in our SEC filings. The company will make a number of references to non-GAAP financial measures that we believe will provide useful information to the investors. A full reconsideration of these non-GAAP measures to the most comparable gap measures is included in the earnings release. With that, I'll turn it over to Andy Callahan, our President and CEO.

Thanks, Amit. I would like to begin by offering a few highlights from our first quarter, which we delivered exceptional top line and bottom line results. I will then offer a few comments on the long-term health of our business before handing it to Mike for a detailed review of our quarterly financial results. We will wrap up with a discussion of our raised guidance for the full year before opening it up to your questions. We laid out a compelling vision at our March Investor Day of Hostess Brands as a differentiated snack company with an advanced business model to deliver sustained, profitable growth. We are off to a strong start on delivering that vision. Our outstanding first quarter results highlight many of the key factors that make us confident in our ability to catapult into the next phase of growth, even as we continue to navigate an environment of heightened inflationary headwinds and supply chain volatility. Now, to some of the key quarterly highlights. Adjusted net revenues grew 25.1% in the quarter. the ninth consecutive quarter of at least 9% sales growth, and the highest quarterly sales growth in our history, as we delivered strong volume growth and benefited from higher prices and favorable mix. Higher volumes accounted for nearly 15 percentage points of our quarterly sales growth, reflecting strong innovation and consumer demand, as well as the continued excellence of our supply chain as we execute well in a dynamic environment. Price mix contributed 10 points to our quarterly growth as we benefited from planned pricing actions in response to rapidly escalating input costs. Sweet baked goods and cookies both posted impressive broad-based growth in the quarter. Our sweet baked goods point of sale, led by the Hostess brand, posted its second consecutive quarter of more than 20% growth. Our focus on large, growing snacking occasions and investments in innovation and marketing continue to drive the category and enable us to capture greater market share. Our share of the sweet baked goods category increased 135 basis points to 22 percent during the first quarter, the sixth consecutive quarter of market share expansion in the sweet baked goods category as we continue to drive overall category growth as we have consistently done over the past three years. Turning to the Bortman brand and its continued growth momentum, Bortman grew point of sale 29 percent in the quarter, well above the 9.5 percent growth of the overall cookie category. Expanding distribution continues to be the key driver of Vortman, fueled by increasing brand awareness and the positive impact of innovation, particularly focused on the fast-growing sugar-free subsegment, where Vortman grew its share by eight points in the quarter. Our portfolio continues to be very well positioned for evolving snacking behaviors as consumers adjust to the post-COVID world. Hostess brand single-serve and multi-pack point of sale each increased by more than 20% during the quarter, with two-year stacked growth of 32% and 34% respectively. Additionally, we grew across all channels, demonstrating the strength of our broad-based distribution and agile model. At the same time, our successful and differentiated innovation remains a key driver of our impressive top-line trends. We are leveraging our deeper understanding of key snacking occasions to create more impactful breakthrough innovation that brings incremental households into the franchise. Our systematic approach has enabled us to create a robust multi-year pipeline of new products to continue to refresh our portfolio and target profitable, high-priority retail customers and channels. For instance, baby buns targeted at the sweet start occasion continue to be a standout innovation in the sweet baked goods category, as lemon and cinnamon baby buns are the number one and number three SKUs across all multi-pack in terms of innovation sales over the last 52 weeks. Recently launched Boost, Our jumbo donut innovation with the caffeine equivalent of what cup of coffee in each donut has garnered over 1 billion consumer impressions in just a few weeks, enabling it to gain rapid penetration with on-the-go consumers. Continuing the momentum, we are launching our next big innovation, Bouncers. Bouncers will hit the market in late summer and provides consumers with a smaller, single-serving, poppable version of our iconic Twinkies, Ding Dong, and Donets brands. Bouncers is designed specifically to bring incremental consumers to our brands, particularly millennial parents, by targeting the lunchbox occasion and making it easier for kids to enjoy our iconic snacks. As we outlined at our Investor Day, We continue to invest in innovation and growth initiatives, particularly advertising and marketing, to support mid-single-digit top-line growth over the long term. Our brand activation initiatives are increasing top-of-mind awareness while driving greater engagement with consumers. which is an important measure for long-term success as 61% of the consumers that do not buy us report the top reason is because they do not think about us. We are changing that. In the second quarter, we are launching our first national digital video advertisement and plan to ramp up additional A&M investments over the course of the year. This will support our core portfolio and the launch of bouncers in the second half. As we continue to increase our advertising investments, we will be highly disciplined in our ROI-focused approach. And our 100% focus on digital will enable us to be more efficient and nimble compared to larger peers with a higher mix in traditional media. While the strong awareness of the Hostess brands, our innovation, advertising, and in-store execution are driving strong trial and increase in household penetration, Our investments in product quality are bringing consumers back. Post-its repeat consumers have grown at a faster rate than the category, leading to increased loyalty and sustained growth. As proud as I am of our top-line momentum, I am equally proud of our dedicated workforce, which has enabled our supply chain to execute at high levels even during a period of unprecedented volatility. The CPG industry, like many, continues to face a dynamic commodities, labor, and freight environment, and the recent macro events are leading to additional and rapidly increased cost pressures and supply constraints. We are not immune to many of these challenges also faced by our peers in the industry. We're revising our inflation outlook, which is now expected to be in the high teens for the full year versus our previous double-digit outlook as we experience broad-based cost increases. We continue to execute on our revenue growth management toolkit, productivity initiatives, and multiple inflation-driven pricing actions to manage inflationary pressures. As we face additional cost increases, We are planning to take an additional price increase later this year across most of our portfolio. We continue to work closely with our retail partners on these pricing actions to ensure that we maintain Hostess and the overall category momentum. We have built a long track record of delivering excellent results in challenging operating environments. And we remain confident in our ability to successfully manage through this latest iteration of escalating headwinds in a timely, responsible manner while protecting the long-term health and profitability of our business. Additionally, we will continue to drive sustainable, profitable growth the right way as we make great progress on our ESG initiatives. As I outlined at our investor day, we have added achievement of ESG goals into the strategic objectives of our executive team and created a formal structure for the board to provide oversight of our ESG programs. We look forward to sharing more on our progress in our next corporate responsibility report to be published in a few weeks. Another milestone in our journey to building strong, sustainable corporate culture that values nimbleness, integrity, tenacity, inclusivity, and a commitment to quality. In summary, we had a very strong start to 2022. Our structural advantages and excellent execution is enabling us to manage a very dynamic and challenging operating environment and raise our full year guidance. More importantly, we remain highly confident in the new and exciting long-term growth algorithm that we laid out in March. Over the next few years, we expect to deliver mid-single-digit organic revenue growth 5% to 7% EBITDA growth, and 7% to 9% EPS growth that we believe will establish us as a best-in-class snacking company that generates top-tier total shareholder returns. Now, I'll turn it over to Mike to go through the quarterly financial results and our revised outlook in greater detail.