Boston Beer Company, Inc.

greetings and welcome to the boston beer company second quarter 2022 earnings 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 as a reminder this conference is being recorded i would like to turn this conference over to mr and to mr mike andrews associate general counsel and corporate secretary thank you sir you may begin

Thank you. Good afternoon and welcome. This is Mike Andrews, Associate General Counsel and Corporate Secretary of the Boston Beer Company. I'm pleased to kick off our 2022 second quarter earnings call. Joining the call from Boston Beer are Jim Cook, Founder and Chairman, Dave Berwick, our CEO, and Frank Smola, our CFO. Before we discuss our business, I'll start with our disclaimer. As we state in our earnings release, some of the information we discuss and that may come up on this call reflect the company's or management expectations or predictions of the future. Such predictions are forward-looking statements. It's important to note that the company's actual results could differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the company's most recent 10-Q and 10-K. The company does not undertake to publicly update forward-looking statements whether as a result of new information, future events, or otherwise. I will now pass it over to Jim for some introductory comments.

Thanks, Mike. I'll begin my remarks with a few introductory comments and then hand over to Dave, who will provide an overview of our business. Dave will then turn the call over to Frank, who will focus on the financial details of our second quarter results, as well as our outlook for the remainder of 2022. Immediately following Frank's comments, we'll open up the line for questions. Given truly hard seltzer's growth last year, we knew we would be facing tough volume comparisons this year. The continuing decline of the hard seltzer segment, which was down 17% in volume and 13% in dollars in off-premise channels in Q2, is deeper than previously expected, which impacted our second quarter results and is expected to continue to impact Trulieve's performance for the balance of 2022. Our 2022 second quarter revenue grew slightly over the second quarter last year, driven by pricing gains. Our second quarter depletions declined 7% and our shipments declined 1% against prior year comparisons. of 24% depletions growth and 27% shipment growth. We made progress improving our second quarter gross margin despite negative impacts from lower than expected volume. As Frank will discuss in more detail later in the call, we also returned to profitability and generated more than $100 million in operating cash flow. Based on our first half performance, our view of the remainder of the year and the current economic environment, including uncertain consumer demand and broader supply chain challenges, we've reduced our volume and earnings guidance for the remainder of 2022. In the second half, we will focus our efforts on Twisted Tea, Trulie, and Hard Mountain Dew, which we believe have the most potential to positively impact our business. Our multi-brand strategy plus our long history of innovation have supported our growth over the long term, and we will work hard to capitalize on these strengths going forward. We're also thankful to our outstanding coworkers, distributors, and retailers who continue to support our business. We're proud to have just been named the number one beer industry supplier in the Tamaron survey, the annual poll of beer distributors conducted by Tamaron Consulting, a consulting firm specializing in the alcoholic beverage distribution industry. It is our fifth number one ranking in a row and 11th in the last 13 years. This is a result of the efforts of all Boston Beer coworkers to service and support our distributors business and to the strong relationships we've built with them over many years. We continue to believe that we have the best group of distributors in the beer business. I'll now pass it over to Dave for a more detailed overview of our business.