BellRing Brands, Inc.

Good day and thank you for standing by. Welcome to the Bell Ring Brands fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Meyer, Investor and Relations for Bellring.

Good morning, and thank you for joining us today for Bellring Brand's fourth quarter fiscal 2023 earnings call. With me today are Darcy Davenport, our president and CEO, and Paul Rode, our CFO. Darcy and Paul will begin with prepared remarks, and afterwards we'll have a brief question and answer session. Press release and supplemental slide presentation that support these remarks are posted on our website in both the investor relations and the FCC filing section at bellring.com. In addition, the release and slides are available on the FCC's website. Before we continue, I would like to remind you that this call will contain 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 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, Jennifer, and thank you all for joining us. Last evening, we reported our fourth quarter and fiscal 23 results and posted a supplemental presentation to our website. Fiscal 23 was a fantastic year for Bellring Brands. Our net sales grew 22% with adjusted EBITDA of 25%. As I reflect on the year, there are three things that stood out to me. The first, is the expanding growth opportunity of this category, specifically the segments that we compete in, ready to drink shakes and ready to mix powders. Both segments have experienced double-digit growth in each of the last three years. Low household penetration combined with strong macro trends highlights a long path of growth. Second, the power and the future potential of our brands. This year we saw tremendous growth on Premier Protein and Dymatize, both reaching new highs across many key metrics. Premier Protein demonstrated strong resilience as it quickly regained the PDPs and households lost in prior years during our capacity constraints. This shows the unbelievable consumer and retailer excitement around this brand, which will help fuel future growth. Third, I've been blown away by our organization. It is hard to manage a high growth business with limited supply. It is a heavy load on all functions to optimize supply and demand, especially operations and sales. Despite this added pressure, our organization is stronger than ever, a reflection of the amazing people and our unique culture. We still have work to do, but are well positioned for a strong 24 and beyond. Now to Q4. I'm pleased to share our results came in at the high end of our expectations. Net sales grew 25% over prior year and adjusted EBITDA was up 23%. Significant production growth allowed us to restart light shake promotions this quarter. We gained meaningful new shelf space on both Premier Protein and Diamond Ties and our relaunched shake flavors and seasonal offerings continued to drive incremental sales. Moving to shake production. In fiscal 23, we made notable progress to grow and diversify our shake supply. Our production grew 17% over fiscal 22, modestly above our expectations. We added two co-mans this year, which continue to scale up. And our second greenfield facility, Michael Foods, will start up in December. They will be a much larger contributor to our second half of fiscal 24 and beyond. Over the past two years, we have transformed our Shake Conan network. We have partnered with the biggest and most reputable players in the aseptic low-acid industry. We now have a scalable, regionally diverse supply chain, which will enable many years of robust growth. Now to the category and brand updates. The convenient nutrition category grew 9% in Q4 as tailwinds around health and wellness and fitness continued to drive growth. Consumer interest in functional beverages and sports nutrition products continues to be high. Ready to drink led the category at 21%, and ready to mix grew 11%. Increased supply and distribution gains are lifting ready to drink growth, while increased marketing is boosting both segments. Premier protein shake consumption accelerated this quarter, up 36%. Growth was tremendous across all channels, driven by improved supply, which allowed us to restart light promotion and expand distribution. The highest growth was in mass and e-commerce, benefiting from our expanded range of flavors and higher in-stock levels. Additionally, e-commerce and club both saw strong growth behind promotional activity. Our fall seasonal flavor, pumpkin spice, demonstrated an impressive 90% incrementality to the brand. Q4 trends continued into October with shake consumption of 27% with volume driving two-thirds of this growth. Our brand metrics reflect our building momentum as Premier Protein reached all-time highs in TDPs and market share. Shake TDPs grew 11% versus Q3 behind distribution gains and relaunched shake flavors. Premier Protein RTD market share reached 21%, maintaining its position as the number one brand in the RTD segment, as well as the number one brand in the broader convenient nutrition category. Premier Protein household penetration added one percentage point versus Q3, reaching over 16% of households. Our household penetration continues to be the highest in the category, with this quarter's growth driven by promotions and distribution gains. Our repeat and buy rates are holding steady, demonstrating our consumer loyalty. According to our most recent brand equity study, Premier Protein remains the number one brand I love and net promoter score in the RTD category. We are very encouraged by all of these achievements, even though we still haven't restarted meaningful marketing and promotion. Premier Protein saw great success this year in other forms, showing the power of the brand. In Q4, Premier Protein powders remained strong, growing over 50% behind new distribution and strong velocities. It reached over $50 million in net sales this year, and we expect robust growth in 24 as we invest behind marketing programs to drive awareness. In addition to powder, our licensing strategy continues to perform well. Although not a significant revenue driver, we are encouraged that the brand has seen success in other high-traffic aisles. Turning to Dymatize, the brand had a great quarter with consumption up 38%. We saw double-digit growth in nearly all channels driven by distribution gains and incremental promotion. Consumption growth continued into October with the brand up 23%. Dymatize continues to have success in mainstream channels with both PDPs and household penetration reaching new highs this quarter. Encouragingly, as Dymatize adds new households and distribution points, Repeat and buy rates are holding steady. In fiscal 24, we are launching a new marketing campaign to continue the momentum and drive awareness and new users to Dymatize. Before reviewing our outlook, I want to give our point of view on GLP-1 weight loss medications. Our proprietary research indicates consumers most likely to adopt GLP-1s are currently light users of protein shakes, but will become heavy users once on the medication. These individuals have reduced total caloric intake but actually need more protein to mitigate muscle loss and certain other side effects. Products like Premier Protein are perfect because they are delicious, compact size, high protein nutrition, giving these individuals what they need without making them feel overly full. Research also indicates that once on the medication, consumers start exercising more and choosing healthier food and beverage options. ultimately increasing the demand for convenient and sports nutrition products. After our initial phase of research, we believe our current products and growth strategies are already well aligned with this opportunity. They are great complements to GLPs while consumers are on the medication and a perfect nutrition solution when people decide to stop taking the drugs to maintain the weight loss benefits. We have begun our next phase of research to better understand this consumer and how we can serve them on this important health journey. In 24, we plan to test media platforms and create it to determine the strongest, most effective strategies and tactics to reach these consumers. We are encouraged by the early results of these medications and feel that they strengthen the already strong macro trends behind our category and specifically our business. Now to our outlook. As you saw in yesterday's press release, we expect fiscal 24 net sales to grow between 10 and 15% and adjusted EBITDA to grow between 6 and 15%. At the midpoint, this guidance is on the high side of our long-term algorithm in both net sales growth and adjusted EBITDA margin. As a reminder, our algorithm in net sales growth is between 10 to 12% with EBITDA margins of between 18 and 20%. Our plan reflects strong volume growth for both Premier Protein and Dymatize and the restart of shake promotions in the second quarter. We plan to step up marketing on shakes in Q4, which is when we expect to hit our target weeks of supply. The demand and supply dynamics remain tight for most of the year, and we will continue to be nimble so we can navigate effectively. In closing, I'm thrilled with our performance this year. We continue to gain momentum in every part of our business. Strong macro trends are driving sustained long-term growth in our categories. Premier Protein and Dymatize continue to reach new consumers and maintain all-time high market share positions. Our flavor strategy is working, and our innovation pipeline is rich, enabling us to bring excitement to consumers and retail partners. Last, we are moving forward on our shakes capacity plan to support our future growth. Before passing over to Paul, I'm sure most of you have heard that Rob Vitale, our Executive Chairman, is currently on medical leave. We have been in close contact with him over the last several weeks. We wish him and his family the best throughout his recovery and we'll be excited to have him back at full strength soon. I will now turn the call over to Paul.