Vintage Wine Estates, Inc.

Good afternoon, ladies and gentlemen. Thank you for attending today's Vintage Wine Estates 2Q22 earnings call. My name is Tia, and I will be your moderator for today's call. All lines will be muted in the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to your host, Deborah Polowiski with Vintage Wine Estates. You may proceed.

Thanks, Tia, 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 DeVillers, our CFO. Pat and Terry are going to provide an overview of our second quarter of fiscal year 2022 results and discuss our strategy for growth as well as our outlook for the remainder of fiscal 22. After that, we will open the call for questions. As you are aware, we will make some forward-looking statements during this formal discussion as well as during the Q&A session, which are outlined here on slide two. These statements imply that future events 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 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 this 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. Reconciliations of non-GAAP to GAAP measures are provided in the press release as well as in the earnings slides that accompany today's discussion. If you do not have the slides, they can be found on our website at vintagewineestates.com. So with that, if you will turn to slide three, I will turn it over to Terri to begin. Terri?

Great. Thank you, Deb, and welcome, everyone. These continue to be very exciting times here at Vintage Wine Estates as we execute on our plan, gaining market share, advancing our multi-brand omnichannel strategy while investing in infrastructure to scale and further grow the business. Our second quarter results were excellent with net revenue growth of 33% over last year. This was led in part due to an impressive 51% growth rate in our direct-to-consumer business. This growth was driven by a combination of increased demand for our products through our various DTC channels, including a strong increase in tasting room traffic. The quarter also saw record quarterly EBITDA for vintage wine estates with year-on-year EBITDA growing by over 135% to $20.2 million. On the acquisition front, we continue to execute on our strategy with the acquisition of Vanessa in October, Ace Cider in November, and the acquisition of Meyers Beverage Group in January of this year. Our three-legged stool strategy, as I call it, is driving our success. There is no one element of the business by itself that delivers these kind of results. Our bar dog brand is a real crowd pleaser and is setting new records for us. Who knew that an adorable monocled dog on a label could create such excitement? Slide four reinforces the strength of our execution. We believe we're outpacing the industry on all fronts with strong execution led by what we believe to be very strong brands in the best categories with the most advanced DTC strategy. This has resulted in the exceptional growth in the quarter and year-to-date results while establishing new records of profitability for VWE. To add to this positive momentum, depletions are up 5.5% in the quarter and up 4.3% year-to-date, with Bardog and Photograph consistently delivering. At Vintage Wine Estates, our focus on the customer experience is integral to what we do. Delivering top quality products and top quality services is essential to developing the brand loyalty and support from our customers that enables us to continue to grow. This relentless focus has seen important customers such as Kevin O'Leary, or better known as Mr. Wonderful, to become strong supporters, brand ambassadors, and partners to vintage wine estates, helping to drive increased brand awareness and sales. 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 have significant growth of 51% as we consistently amplify efforts through our many direct-to-consumer channels. These include our tasting rooms, wine clubs, e-commerce, QVC, telemarketing, and digitally native brands. Adding to the future, we now have the addition of Vanessa and Ace Cider, which we expect will help sustain our growth. Of note, our average order value across all key transaction sites was up 8%. Volume for direct-to-consumer was up 18.5%, and operating income improved 65%. reflecting an excellent improvement in channel and product mix. Moving on to wholesale, our revenue was up about 15% and benefited from both the acquisition of Ace Cider and strong depletion volume growth, which was up 5.5% across the segment and up an impressive 10.6% for our priority brands. Next, on our B2B business, demand was strong. This is our private label and custom crush and production services. We shipped a program that had been pushed out from the first quarter, and we had another special in-and-out program with an existing customer that went quite well. With that, let me turn it over to Pat to talk more about our results, the recent acquisitions, and our outlook. Pat?