Flow Beverage Corp.

Good morning, everyone. Welcome to Flow Beverage Corp Fiscal Q3 2024 Conference Call. As a reminder, this conference call is being recorded on September 17, 2024. At this time, all participants are in the listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for research analysts to queue up for questions. Before we begin, we would like to remind you that today's presentation and discussion contains forward-looking statements that involve known and unknown risks and uncertainties and other factors that could cause actual events to differ materially from current expectations and may cause actual results, performance, or achievements to be materially different from those implied by such statements. The forward-looking statements are based upon and include the company's current interest estimates, plans, expectations, opinions, forecasts, projections, Targets, guidance, or other statements that are not statements of fact. Any statements contained herein or discussed during today's session that are not statements of historical facts may be deemed to be forward-looking statements. A number of factors could cause actual events, performance, or results to differ materially from what is projected in the forward-looking statements. A more complete discussion of the risk and uncertainties facing the companies appear in the company's annual information form dated January 29, 2024. And the company's management discussion and analysis for three and nine months ended July 31, 2024, which are available under the company's profile on CEDAR+. Your caution not to place undue reliance on these forward-looking statements which only speak to the date of this presentation. The company disclaims any intention or obligation except to the extent required by law to update or revise any forward-looking statements. As a result of new information or future event, or for any reason, any forward-looking statements contained herein or discussed during today's session is expressed qualified in its entirety by the above cautionary statements. I will now turn the call over to Nicholas Reichenbach, Chairman and Chief Executive Officer of Flow. Please go ahead, Nicholas.

Thank you, Operator. Good morning, everybody. I'm joined today by Trent McDonald, Flow's Chief Financial Officer and EVP of Operations. On today's call, I will start by reviewing our recent milestones, and before I pass the call to Trent, I will also review Flow's strategic growth priorities. Trent will take you through a detailed review of the Q3 results and share an update on our path to profitability. After Trent's remarks, I'll open the call for questions from our analysts. This morning, for the second quarter in a row, we report the most profitable quarter since the company has been public. We delivered the lowest adjusted EBITDA losses as a public company as we scale our co-packing operations and realize our financial benefits of our operational transformation and restructuring. The highlights of our results is an increase in gross margin to 34%, which resulted in gross profits of 4.6 million. This is the highest amount of gross profit in Flow's history. We achieved these results by focusing on profitable channels for our Flow brand and Flow branded products, and by ramping up our co-packing operations, which increased 62% year over year. We now have four lines operating on all cylinders in our Aurora production facility in Canada. we received approval for alcohol production and began producing for our largest co-packing client, Beatbox. In August, we increased the size and term of our co-packing agreement with Beatbox to $213 million in net revenue over the next six years. We have now reached $246 million in take-or-pay contracts, which will help us get to profitability and provide growth of net revenue for years to come.

Boom.