Vintage Wine Estates, Inc.

Good day and welcome to the Vintage Wine Estates third quarter 2023 financial results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Debra Polosky, Investor Relations. Please go ahead.

Thanks, Dave, and good afternoon, everyone. We certainly appreciate your time today and your interest in Vintage Wine Estates. We have flooded you with quite a bit of information. Following the market close, we filed our restated first quarter 10-Q agreement the press release that details the results for our year-to-date period as well as the third and second quarter. And we've also filed our second quarter and third quarter 10Q. So on the call with me here are John Marimarco, our interim CEO, Terry Wheatley, our president, and Chris Johnston, our CFO. So if you don't have a copy of our earnings release, or the slide deck that will accompany our conversations day, you can find them on our website at ir.vintagewineestates.com. John is going to begin with a brief overview of the quarter, then Terry and Chris will provide more details on the results. We will then open the call to our investors and analysts to ask questions. If you will turn to slide two, you will find our safe harbor statement. As you may be aware, we will make some forward-looking statements during this presentation and the Q&A session. 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 we state here today. These risks and uncertainties and other factors were provided in our SEC filings that you can find on our website or at sec.gov. I will also point out that during today's call, we will discuss some non-GAAP financial measures, which we believe are 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. We have provided reconciliations of comparable GAAP with non-GAAP measures in the tables that accompany today's slides and release. So let me turn you over to John to begin the discussion. John?

Thanks, Deb, and good afternoon, everyone. As you know, I have been acting as interim CEO since early February, and I can attest that we have been very busy working to turn the business around. We are focused on rebuilding a more profitable operating structure, realigning the business to focus on our quality assets, and creating a solid structure to deliver future growth and opportunities. Let me start with a quick overview of what I have found since taking on this role and the actions we have taken. First, BWE has an excellent team of people. In addition to being highly experienced and knowledgeable about agriculture, grapes, wine making, bottling, sales and marketing, they are very passionate about what they do. We have a growing finance team that has brought depth to our processes. They are all hands on this restructuring of our financial accounting processes from each book entry through to consolidation and reporting. We have a number of great brands, award-winning wines, some awesome vineyards and top tier tasting rooms, as well as a growing cider business and very creative sales and marketing programs. And finally, we have excellent potential to transform this business into a stronger, more profitable U.S. wine company centered on key brands and operational excellence that create stronger earnings power. There were also a number of things we needed to change. We have too much debt. and faced with the impacts of rapid and significant inflation in the midst of slowing spend by consumers on discretionary items, we have to be vigilant with our cash management. The team had already identified the initial actions we took that resulted in net contributions to operating income of about $8 million. This included raising prices on certain brands, increased shipping costs for our TTC business, restructuring freight agreements and simplifying the business, And as part of that effort, we reduced our headcount by about 4% at the beginning of March. We cleaned up our tail products and were able to reduce our SKUs by half from about 4,000 down to about 2,000 thus far. These tail products represented a nominal amount of total volume. I believe we can further cut that in half again. This will be driven by the reduction of parent SKUs from about 900 down to 500. Over the company's 20-year history that included many acquisitions, there had never been any culling of smaller and significant inventories. The strategic action creates greater operating deficiencies, as you might imagine. I will leave the review of our results and financials to Terry and Chris, but will point out that the proceeds from the sale of our Tenma Vineyard went directly to reducing debt. As part of our evaluation of restructuring scenarios, We are also contemplating other potential asset sales to accelerate debt reduction. We are focused on driving operating efficiencies, leveraging key resources, generating cash, and monetizing assets. With that, let me turn it over to Terri.