Boston Beer Company, Inc.

Greetings and welcome to the Boston Beer Company fourth quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. And if anyone should require operator assistance, please press star zero on your telephone keypad. 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, 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 2024 fourth quarter earnings call. Joining the call for 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 without a disclaimer. As we state in our earnings release, some of the information we discuss and that may come up in 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 10Q and 10K. 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 an overview of our business. Michael will then discern the call over to Diego, who will focus on the financial details of our fourth quarter results, as well as our outlook for 2025. Immediately following Diego's comments, we will open the line for questions. As I look back on 2024 our depletion trends continue to improve and our multi year margin enhancement plans delivered 200 basis points of gross margin expansion, which supported our non gap EPS growth of 31%. We achieved this EPS growth, while increasing advertising investments in our brands. Our business continues to be highly cash generative with 2024 free cash flow of $173 million or $14.70 per share, which allowed us to repurchase $239 million in shares in 2024. The improvements in our operational and financial performance occurred in a dynamic environment with inflation impacting near-term consumer behavior. We've also experienced greater competition in the fourth category, sometimes called beyond beer, as consumers seek variety and more players enter the category. Over the long term, we expect the beer category to remain highly relevant to our consumers with significant growth opportunities in the fourth category as lines continue to blur between beer, wine, and liquor. There are some factors such as health and wellness and cannabis that are somewhat impacting the total alcoholic beverage category. But as I previously said, the beer industry is best positioned to take advantage of the growth in the fourth category. These products are typically sold in a can, need to be in the cold box, and beer companies have the production capabilities to produce them, and beer wholesalers have the infrastructure to service them. The Boston Beer Company is well-positioned, given our proven track record of innovation and our manufacturing infrastructure and our best-in-class sales force and strong wholesaler relationships. Our priority for 2025 are to support our category-leading brands to improve their market shares, launch strong innovation, and continue to expand our gross margins. As we've worked through our plans, we decided to step up our level of advertising investment across the portfolio to improve our market share trends, ensure the successful national launch of SunCruiser, and return to long-term volume growth. As Diego will discuss further in his remarks, we're continuing to execute our multi-year productivity plans across our three focus areas of procurement savings, network optimization, and brewery performance. These efforts ensure that we have fuel for investment in our brands and allow us to enhance our gross margin despite potential volatility in the volume environment. In summary, we made solid progress in 2024, but are not yet where we want to be. I'm confident that we have the right strategy and team in place and that the additional investments we are making this year position as well to improve market share. As Michael will discuss, we're focused on end-to-end execution and being strong operators to deliver long-term, sustainable growth. Our 2025 financial guidance provides a range of outcomes to incorporate the dynamic consumer demand environment and our intention to lean further into investments in our brand when we see faster returns on volume. To close, I'd like to thank the Boston Beer team, our distributors, and our retailers for their efforts and support that enabled our progress in 2024. And now I'll pass the call to Michael.