Boston Beer Company, Inc.

Greetings and welcome to the Boston Beer Company second quarter 2024 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. As a reminder, this conference is being recorded. And 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 2024 second quarter earnings call. Joining the call from Boston Beer are Jim Cook, Founder and Chairman, Michael Spillane, our CEO, and Diego Reynoso, 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 it over to Jim for some introductory comments.

Thanks, Mike. I'll begin my remarks this afternoon with a few introductory comments and then hand over to Michael, who will provide his view of the business and the actions we are taking to position the company for a return to long-term growth. Michael will then Turn the call over to Diego, who will focus on the financial details of our second quarter results, as well as our updated outlook for 2024. Immediately following Diego's comments, we will open the line for questions. I'll begin my remarks with an overview of the market environment. In the first quarter, we were pleased to see flat depletions and solid shipment growth, with shipments benefiting somewhat by shipping ahead of the implementation of our new customer order management system. As I mentioned at a recent investor conference, April depletions began to slow across the industry with Easter time shifting results and coming in soft. May and June depletions improved somewhat from April, but continued to decline compared to the prior year periods. Our current assessment is that demand appears to be improving from April lows and that April trends likely reflect the comparison against significant dislocations in the beer industry that began in April of last year. Our shipments for the second quarter reflect the impact of shipping ahead of depletions in the first quarter and not fully shipping into improving demand in the latter weeks of June. We are working in July and August to build inventories that are wholesalers back to target levels. I'm pleased to have Michael complete his first quarter as Boston Beer's CEO, and he will discuss his assessment of the business and areas where we plan to focus to reach the full potential of our strong brands. We've also updated our guidance to reflect the first six months of results and our view of potential outcomes for the second half, which Michael and Diego will discuss. In summary, we saw soft volume trends early in the second quarter, which we have reflected in our revised volume guidance, but we're confident in our plans to grow our brands over time and have our brands reach their full potential. The commitment to invest and innovate across both our core brands and in new beyond beer categories remains unchanged. Our margin initiatives are taking hold with gross margin expanding over 250 basis points year to date and potential for continued meaningful improvement in the coming years. The high cash-generative nature of our business and strong balance sheet allow us to fund our strategic initiatives for the business while also returning significant cash to shareholders. Year-to-date, we've generated over $90 million in operating cash flow and repurchased $125 million worth of stock. I'd like to thank our Boston Beer team, our distributors, and our retailers, for their continued support and I'll now pass the call over to Michael.