BellRing Brands, Inc.

Welcome to the Bell Ring Brands third quarter 2022 earnings conference call and webcast. Hosting the call today for Bell Ring Brands are Darcy Davenport, President and Chief Executive Officer, and Paul Rode, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 1.30 p.m. Eastern Time. The dial-in number is 800- 839-5241. No passcode is required. At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Matt Maynor, Investor Relations of Bellring Brands, for introductions. You may go ahead.

Good morning, and thank you for joining us today for Bellring Brands' third quarter fiscal 22 earnings call. With me today are Darcy Davenport, our president and CEO, and Paul Road, our CFO. Darcy and Paul will begin with prepared remarks, and afterwards we'll have a brief question and answer session. The press release and supplemental slide presentation that support these remarks are posted on our website in both the investor relations and the SEC filing sections at bellring.com. In addition, the release and slides are available on the SEC's website. Before we continue, I'd like to remind you that this call will contain certain forward-looking statements which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call and management undertakes no obligation to update these statements. As a reminder, this call is being recorded and an audio replay will be available on our website. And finally, this call will discuss certain non-GAAP measures. For a reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Darcy.

Thanks, Matt, and thank you all for joining us. Last evening, we reported our third quarter results and posted the supplemental presentation to our website. I'd like to start with the quarter's headlines. Net sales grew 8% over prior year and our adjusted EBITDA was up 15% with healthy margins. Premier Protein is tracking to our expectations. It grew 7% net sales versus prior year and grew sequentially 23% over Q2. Premier Shake supply continues to be tight and we continue to allocate supply. However, I'm pleased with the progress we are making to satisfy our customers. In fact, this quarter we prioritized building some inventory to improve customer fill rates rather than maximizing our sales volume in the quarter. This helps both Bellring and our customers more reliably build the brand. Meanwhile, Dymatize continues to show impressive momentum. Elasticity was a bit higher than expected, but the brand still had a strong quarter at 17%. As you saw in yesterday's press release, we tightened our fiscal 22 guidance range for both sales and adjusted EBITDA. We slightly reduced the top end of sales growth and increased the bottom end of our EBITDA range, factoring in our actual Q3 performance. As planned, Q4 expectations are largely unchanged, and sales should sequentially grow versus Q3 and deliver our largest year-on-year growth rate in 22. Our guidance delivers an annual sales growth rate of between 11% and 14%, coupled with robust EBITDA, despite capacity constraints and limited promotion and marketing. Our industry, like many others, is experiencing inflationary pressures. We continue to see our major dairy protein inputs for our shake products escalate. As a result, we announced an additional price increase on Premier Protein RTD shakes effective Q1 2023. Our preliminary 23 outlook still suggests our 22 back half adjusted EBITDA dollar run rate to be a reasonable proxy for the full year fiscal 23. We believe our net sales will be above our long-term algorithm of 10 to 12 percent growth, driven by both strong volume and pricing. We will provide more detail on fiscal 23 next quarter. Now turning to our category, brand highlights, and updates on our capacity expansion. We continue to see healthy growth in the convenient nutrition category. Ready-to-drink beverages grew 9% and ready-to-mix powders grew 14% in dollars. Although pricing was a major factor for the dollar growth, consumer tailwinds around wellness and healthier food solutions continue to push the category higher. Premier Protein continues to demonstrate tremendous strength. Market share returned to growth in Q3 and TDPs stabilized, while repeat rates and velocities held steady, continuing to exhibit our high consumer loyalty. While Premier Protein shake consumption and household penetration declined in Q3, this is consistent with our expectations given our intentional pullback in promotion, marketing, and SKUs. we expect overall shake consumption to be down in Q4 as well versus prior year as we lap a big promotional period. Encouragingly, July, which had little promotion in the prior year, posted a consumption increase of 11% as a result of improved retailer stock levels. We remain confident we will continue to see this type of improvement as our new supply continues to ramp up and we return to offense in fiscal 23. These metrics reaffirm that we have a long runway for sustained growth. Turning to Dymatize. The brand had another great quarter with consumption dollars in the U.S. of 21% across tracked and untracked channels, and that momentum continued into July. Although we did see a distribution loss in club as a result of our last price increase, all other key channels saw significant double-digit growth despite reduced promotion and marketing. Overall, the brand's health remains strong. Dymatize is the number one or number two sports protein brand in most of our key retailers with a ton of upside. As planned, we will begin to ramp up marketing and promotions in Q4 to further drive demand. Moving to our capacity expansion, we remain on track. We improved our service levels, trade inventories are starting to rebuild, and our command partners are producing largely as expected. We increased our shake production by 20% versus prior quarter. In closing, I'm pleased with our year-to-date performance in a very challenging environment. We remain on track to deliver not only our full year guidance, but equally important, complete our key objectives that will set us up for a strong fiscal 23 and beyond. We have two leading mainstream brands with tremendous consumer loyalty. Premier Protein is gaining momentum and market share despite no demand driving activities. New capacity is coming along as expected, which paves the way for future years of robust growth. Dymatize continues to win with mainstream athletes, and the brand is accelerating into Q4 with a new media campaign, distribution drive, and new products. We feel confident about our long-term outlook and the building blocks we have in place to get there. Thank you for your continued support, and I look forward to updating you on our progress next quarter, along with more specifics around the upcoming fiscal year. I will now turn the call over to Paul.