Boston Beer Company, Inc.

Greetings and welcome to the Boston Beer Company fourth quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A brief 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. And as a reminder, this conference is being recorded. It is now my pleasure to introduce to you Mike Andrews, Associate General Counsel and Corporate Secretary. Thank you, Mike. 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 fourth 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 reflects the company's or management's 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 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 and our 2023 plans. Dave will then turn the call over to Frank, who will focus on the financial details of our fourth quarter results, as well as our outlook for 2023. Immediately following Frank's comments, we'll open the line for questions. Over the last few years, our company has experienced rapid growth, ending 2022 with a revenue base of $2.1 billion, which is almost double the $1.2 billion in revenue generated in 2019. A large portion of this increase is attributable to the outsized growth of the hard seltzer category. As we mentioned on previous calls, the hard seltzer category dynamics have been challenging as the economy reopened, and it's been difficult to predict where consumer demand will ultimately fall. We'd expected early trends to improve in the second half of 2022 against easier prior year comparisons. Truly Performance has not yet turned around and Dave will take you through additional plans we have for Truly. We expect to help improve the brand performance in the second half of this year. Looking back on 2022, our projections for Truly and some of our new brands were too high and we produced and sourced materials at the upper end of our projections to avoid out of stocks. We've also had an expansion of product offerings that has introduced more complexity into our supply chain and we planned our cost structure at higher levels of volume. This has resulted in financial performance that is below our expectations. In 2023, we're working to simplify our business to reduce complexity and improve margins as well as adjusting our cost structure in line with our current volume expectations. We believe the actions we are taking will benefit the company over the long term, and that the Beyond Beer category, where we have an advantage position, will grow over the next several years. We expect the operational and supply chain changes we are making this year, combined with our history of innovation, strong brands, and our top-ranked sales force, will lead us to long-term success. A strong balance sheet enables us to continue to invest in our brands. And today we announced that we repurchased 8.9Million dollars in stock thus far in 2023. We released our first ever environmental, social and governance report, which established a baseline of data that we will work to improve over the long term. We now have a more standardized approach for understanding our energy use and our water use. The ESG report also allowed us to highlight our focus and continued progress against our efforts to cultivate a culture of inclusion through awareness, engagement, and accountability across the company. As shared in this report, our coworkers gave Boston Beer high scores on questions related to pride in working for the company, belief in our values, our concern for their safety and well-being, and their confidence in the future of Boston Beer. To close out my remarks, I would like to thank our outstanding coworkers, distributors, and retailers who continue to support our business. And now I'll pass the call to Dave for a more detailed overview of our business.