Vintage Wine Estates, Inc.

Greetings. Welcome to the Vintage Wine Estates, Inc. First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Debra Pawlowski, Investor Relations for Vintage Wine Estates. You may begin.

Thanks, Kyle. And hello, everyone. We certainly appreciate your time today and your interest in Vintage Wine Estates. Joining me on the call are Pat Roney, our founder and CEO, Terry Wheatley, our president, and Kathy Develers, our CFO. Pat and Terry are going to provide an overview of our first quarter of fiscal year 2022 results and discuss our strategy for growth as well as our outlook for fiscal 22. After that, we will open the call for questions. As you are aware, we will probably make some forward-looking statements during this formal discussion, as well as during the Q&A session, which are outlined here on slide 2. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with Securities and Exchange Commission. These documents can be found at our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. With that, if you will turn to slide three, I will turn it over to Pat, or I'm sorry, Terry, to begin.

Thank you. Yes, thank you, Deb. And welcome, everyone. These are very exciting times here at Vintage Wine Estates, and we're making excellent progress gaining market share, advancing our multi-brand omnichannel strategy, while building a stronger operations and finance infrastructure. We grew over 3% in the quarter over last year and importantly had a 37% revenue growth in our direct-to-consumer business. And this growth was up against headwinds presented by supply chain challenges. Russell Joy, our COO, has joined us at an opportune time to help us deal with juggling of current and new suppliers to get the glass and other supplies we need and working to meet our customer requirements. Looking to our growth efforts, VWE launched the first-ever celebrity-branded e-commerce retail store that is vertically integrated to VWE direct-to-consumer production, management, and fulfillment. The e-commerce store is rich with content information and appeal to an established customer base, supported with best practice and proven digital-to-delivery success. We are first movers in this arena and believe the e-commerce retail store model is the next frontier in celebrity alignment. We believe our strength in digital marketing is a clear differentiator for us as we directly touch close to one million individuals who love our wines. We expect to leverage this channel with our ready to drink offerings as well. Looking to slide four, we're making solid progress on our efforts to strengthen our finance infrastructure to address the incremental demands of being a public company, but also the variances in the accounting processes. We engaged a consultant to review our control processes and staffing. They are providing the suggested adjustments to our inventory and costing oversight to ensure we have the needed processes and the right people throughout the organization to support a strong, reliable, and sustainable finance and accounting structure. we also continue to progress building out the business and today announce the acquisition of a cider company. Pat will review the acquisition in greater detail, but it's an excellent addition to our RTD offerings, providing us a greater diversity with a leading cider brand and adding a new channel to our market. Turning to slide five, you will see we remain fairly evenly balanced among our three business channels. In our direct-to-consumer segment, as I mentioned, we had significant growth of 37% as we consistently amplify efforts through our many direct-to-consumer channels, including our tasting rooms, wine clubs, e-commerce, QVC, telemarketing, digitally native brands, and the addition of the Sommelier company. Our customer-first philosophy, combined with our top-tier digital marketing capabilities, are driving our growth. Our marketing tactics leverage customer advocates to drive brand recognition and celebrate loudly our superior customer experience. We had increased tasting room traffic, significant growth in wine club membership and retention, and are continuing to gain traction in our e-commerce and digital channels. Of note, our average order value across all key transaction sites was up 3%. Volume for direct-to-consumer was up 13%, and operating income improved 127%, reflecting an excellent improvement in product mix. Moving on to wholesale, our revenue was up about 8% and benefited from increased international volume and more favorable product mix. This more than offset some minor brand and marketing programs that we discontinued since the first quarter last year. Strong margin in this business also reflects the favorable product mix. Our prime brands are winning market share. We continue to be encouraged by the reception of Bardog by retailers and the engagement with consumers for this brand. Bardog is up almost 37% in depletions. Firesteed, B.R. Cone, Cundi, and Cherry Pie are also brands that continue to grow above the industry average. We continually evaluate the portfolio to determine where brands are succeeding and manage our distribution channels to drive sales. And next, our B2B business. Demand remained very solid in B2B, which is our private label and custom crush and production services. Shipments for this segment were challenged because of the difficulty of getting enough glass in a timely fashion in order to meet customer schedules. As a result, we had shipments to a major retailer rescheduled into the last nine months of fiscal 2022. These programs are shipping now and will continue through the third and fourth quarters as well. We also have new commitments from a large retailer for a third quarter buy that will support our B2B business as well as proposals with several other B2B customers we should see materialize in the later quarters. With that, let me turn it over to Pat to talk more about our results, the recent acquisitions, and our outlook. Pat?