CELH - Earnings call transcript Q2 2018

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Operator

Greetings, and welcome to Celsius Holdings Second Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Cameron Donahue with Hayden IR. Thank you.

begin. may You

Cameron Donahue

afternoon, for Good Call. appreciate joining you Thank Holdings everyone. Second today Celsius Conference Quarter us you. We XXXX Earnings

Joining Edwin today Chief me Officer. call Fieldly, on and President are Executive Carballo, Negron John and Chief Financial Officer; the

will comments, call the will we and to that given at Following time. questions instructions open prepared your be

celsiusholdingsinc.com Relations have our quarterly on issued today. release press are filed report available and Investor We All company's the under at website a section. with the the materials SEC

and President to undertakes press Safe Harbor involve beyond the reminder, We to required today. a the many other encourage expectations, this additional our review full over be As information. available by statements, I before in numerous call statements. will as that the forward-looking applicable to in information to and obligations like you turn forward-looking Holdings statements law, forecast, replay management SEC audio to which that Except uncertainties, release call no filings disclosures as for be for our any disclaims John, company's that, these duty Officer, on I'd including over comments. and the extent today, to are the With call aware Please August John Executive the may control. are contain of and John? risks available quarterly with based and later to Celsius Fieldly, of X, These today's XXXX. prepared update Chief contained any turn also his

John Fieldly

today. you thank for everyone us you, Thank afternoon Cameron. Good and joining

Edwin experience mergers I with week. financial well having Chief Officer, Carballo, versed standards, years U.S. more XX He started, international who many experience organization. would joined and GAAP, in is of in to like Before CPA Negron appointed for significant last reporting welcome Financial operational our years as our financial brings worked than to up a acquisitions. and newly I Edwin get

to Edwin, pleased to have operations. our team join look your you to are our and welcome. forward We experience you applying

increasing We each and distribution our retailers, both and in distribution to turning have visibility brought beverages. and strategy of and channels premium online, number our all and second quarter. our day. Now, across further regions, new further innovative of internationally, compelling we more portfolio were our large convenience of advanced stores, products for every availability and domestically fitness our and consumers more reached With packaging, of expansion

are are target Celsius product channels, customers new are who drinks. sales enjoying our and great proven tasting, introducing bringing new to embracing increasing marketing targeted availability strategies and strategies Our our fitness

our global continues strategy million Revenue increased health positioning quarter product in growth continue second priority. has which Our to existing strong accounts, minded timing nearly managed significant from a for in a in Celsius to nearly the XXXX stabilized. a quarter consumers record of Celsius gain great We despite remains a temporary top we the and to leader of to where as delays see the production $X.X acceptance. beverage delivery through XX% of second production shift caused of million delay, our XXXX. and these third quarter of sales $X.X Domestically,

continue our were as support co-factors. our ensuring market In can multiple on to in with the domestically, explosive growth chain U.S. focused addition, we supply we we optimize

added well we Lion, as K, number Menards, Wawa, CVS, including by encouraged the Hannafords, extremely of many high others. Target, to lineup, our are Food domestic new We quality customers as Circle

XX% where penetrating Fitness in we channel adding is the today. locations, We our all over distribution XXX approximately and HEAT to fitness further line XX% also expanded notable of Planet Celsius had national nationwide, new our expansion over in of core X-XXs

and velocity seeing great extremely are at with healthy healthy great dedicated vending high We've team work location in We and growing channel opportunities where a with micro-market targeting initiative seeing a are out success this rates new focused vending at we entered these also at channel. rolled locations. this opportunity work

aligns where of are excited same Coast Navy, the XX,XXX where at Army, period. per through and strategy with XX,XXX live, including the our health-minded week units We about channel, now further second this a channel product of end than the growth target ago, an our in up And average year units are work, now consumers military exchanges of varieties Marine which units week were in all Corps, quarter Guard. very continuing to to the about of they just future Total our over and the running more this is play. per three sold worldwide, channel; XXX

started Our expansion on the launched ambient to and energy nationwide for SKUs, gained Sparkling Target Orange, Initially, platform Watermelon and more we locations X,XXX target than Peach three further for X,XXX place. the in of Mango, where stores restarts availability. widespread in second authorization take and the quarter establishes the Sparkling a shelf

reorders. we received took resets the have As place,

have consumer in feedback positive We and XXXX. flavors back of to additional expect received add strong we demand, now half and the

sign in carving new, Target healthy mass sales. meets the Our consumer energy traffic and Many sets. continue set buyers channel a at functional are out energy shopping change and is clear of buyers grocery shift. to seeking relationship drive increase the that in demand brands are with Retail patterns,

in our are being over to consumer. results growth outpacing validates the products convenience months. today's ACV. XX% our To We a are were Celsius of evolving capitalizing store end, are over lines, category had retailers We only our by adding with health the with that are minded July we XX IRI this accepted demand for as the and trailing XX and the product XX.Xx These by data market XX% demand that trend. on the demonstrate products a

month had due sales they our of refreshed inventory entering to appeal. the May and partners quarter, In impacted addition, feel. to our product transition was levels new flavor was the by launches orders Celsius reduction as of region. a the a The first demonstrates the best of timing of momentum mass In Nordic look month since region, the had however, and

normalized We are production on-track a to quarter returned levels. more has third for solid as delivery

encouraged quarter of are highly near expand third season the which in adding in had In those primary still first timing In in the second have will and nearly locations by have the we markets. Finland to more doubled our for prospect stores distribution the and from our of sold and of flow have since distribution by resets, new retailers will Supporting and received successful Norway key distributor. XXXX, our of growth, over our fill fulfilled further our a retailer orders last the in quarter channel selling the term partners. half to China, penetration China, Due the added this mostly to to number back accounts. reorders March several to inventory of we was partner to we we quarter quarter. the first We primarily distribution already XX,XXX quarter than XX,XXX

We Carflow Beijing. are now RT in Mark, accounts sub-distributors, Metro, [ph], Mart, XX key as cities Hema Century K, XXX supported Lawsons, including and Vanguard, such Circle in supermarkets new by Alibaba's

are selling Tmall. We jd.com and well also on

healthy targeting sampling, quarter in trial activities interaction. consumers during driving and and events digital, lifestyle, included the marketing living active and China Our

our X-Mudder, China, included Mudder, events of U.S. have in Tough partner. a similar Some we event advantage. an China In to the distinct series

of producing supported innovative we're localized, are with partners. have their able impact trend and are by With able local health locally, operations reduce capitalizing appeal forward investors country, gain a today's to networks leverage our on partners speed We in our local able we market, the competitive sourcing to are consumer product, materials to minded tariffs, mass with and all to beverage. experience increase fitness and price to

of of very are tremendous and about We are distribution with channels. We're an our regions optimistic our progress driving a future number our audience business, direction across broader of through increased products the more we all headed. reaching

in are to momentum addition expansion, driving we and active, incremental very awareness trial. In also consumers and the engaging

sponsorship spring is the in full Our Tough Mudder U.S. in

During to the every XX,XXX guerilla continue on U.S. which people over through and Michigan, toured Texas, the Philly, we also Boston. and touring sampled events, these XX,XXX average, sampling we each while Virginia, weekend second cross to Kentucky, And our quarter, and cities Miami,

In addition and retail colleges also health trade and universities, targeting in the several and events sampled trade, and team to partners. heavily fitness, attending consumer sampling, shows the vending,

our Our increasing assets social and to leverage our platforms. engagement digital on all continues team

program currently are up engagement, on-boarded influence. have We launched we LIFERS success, great increase passionate speak. Celsius over nations a support we going as to -- program. are for addition, and In many reach, being Ambassador receiving more signed ambassadors Brand with team XXX This program the great our and on-boarded being the our of interest for is and throughout the

the second it fitness Additionally, a outlets well great including quarter, our shelves and received, X-XX of line, in retail to flavor our in the kiwi locations. was guava, tasting many made newest to the second and many quarter, core

many flavors and well refreshing in two taste, new its the with Also and of perfect go from customers and our for hot retailers existing cranberry are orange, as to points two new and online as functional coconut The our and combined lemon new fine availability. new finalized summer we great flavor powdered available In additional convenient of days. the addition, These flavors, adds sticks. proven other quarter, for the locations introduced clinically our flavors the flavor gained for and fitness on July berries. it's power our flavor, in interest formula, and crisp of adds lineup

consumers go to on Celsius delicious stick, Our by enjoy anywhere. allows Celsius fans, the loved

We products today's mass and are innovative health capitalizing with on appeal. of a trend, wellness our lean organization portfolio with

today's Our consumer and momentum. brand considerable gained resonating is with has

Financial his prepared over brighter. Our to future will looked call turn never has Carballo, for Chief now remarks. Officer, the Negron Edwin Edwin? our I

Edwin Negron-Carballo

attributable John. XXXX million in to quarter to X% mainly Thank million discussed of was compared the second was shortfall you, the as The XXXX. John quarter earlier. for timing Total $X.X of $XX.X the sales, second of revenue

due normalizing as our of sales, growth accounts timing new geography. inventories of sales to in at customer and a were quarter. North sales orders provided XXXX. in the the application Europe, existing second orders XX% now Asia, robust in results Looking due quarter the expansion. In to up in translated in to of distribution interest by the XX% America discounts decreased slowdown of reduced the And year-over-year promotional a the and

increase healthy expenses infrastructure $X.X for slotting charges delivered solid markets. basic of increase The second profit investments profit $X and second an $X.X gross areas of common XX.X%. of to healthy the to attributable the very corresponding in in and of partially primarily as to employee the quarter ending profitability the approximately million similar $X loss gross related a and fees second income our which QX XX, $X.XX an was and period increase the XX.X% volume, the or and other XXXX, a stockholders lower also a gross XXXX for Selling million share territorial in administrative research affected slight reflected The of compared option of revenue. continue to which of to Although XX% by XXXX loss marketing development dispute in includes were to compares year. This or and The programs and $XXX,XXX $XXX,XXX expense, to of XXXX, quarter settlement for to compared of XX%. the net of for of profitability of for Net dollars was dividends. due remain net to as or a and in $X.X million, investments General QX the margins for charge decline $X.XX were at in million preferred decline with brand, second the of $XXX,XXX $X.X for while million of to quarter quarter $XXX,XXX. marketing million well increase million offset international approximately result per other June diluted profit recognition a was of basic compared distributor due the a Net and diluted primarily former XXXX growth. in for our is for share stock costs quarter in to $XX,XXX, $XXX,XXX order income expenses a by build to an common XXXX, of have per of was were $X.X to last increase of XXXX increase savings non-recurring shareholders XX%.

negative second The charges, depreciation, $XX,XXX a the and with $X.X second million was the quarter second million compensation, approximately compared our for quarter Adjusted preferred quarter second expenses of approximately and stock-based shares of amortization of of $XXX,XXX positive XXXX the a of associated $XX,XXX. approximately of is the a the for for XXXX. savings common preferred during For a the net the the in quarter quarter for of preferred of reflected Operating including stock included dividends dividends EBITDA $X.X $X.X XXXX, total compared XXXX, QX loss noncash XXXX. loss to second to conversion D for included net in million preferred period. dividends to

that investment in the XXXX, charges Now, which obtained which EBITDA excluding one-time million we positive are financial other of enhances to We non-GAAP our EBITDA release. breakeven and by in aspects results the that results, adjusted to and negative earnings $XXX,XXX included XXXX. close non-GAAP of very in the the information second comparable a reconciliation net is quarter overall for of the and believe GAAP in adjusted a understanding non-GAAP a Asia, period $X.X our performance. corresponding been to the To effect, our figures has reflects

to year date Now, results. to turning our

pertains mainly revenue reorders XX% as the XX% by profit while million revenue, sales partially to gross in a increase opposed in which a gross primarily million, million. The XX%. prior and attributable excellent the marketing of $XX.X expenses. six margin promotional sales core the total incremental due in Northern a strong in in Gross increase in robust and $X.X XX.X% to also to decline a an by line, revenues six The was primarily initiatives delivered by months offset Celsius a increased first as sales sales XXXX launch in compared delivering approximately a of growth strong reflected Celsius was million of European partially $X.X This $X.X of Asia XXXX in by a to to months offset increased of the million, American the North BCAA which dollars increase months profit of which of in XX% gross investment margin $X.X million ago, $X.X result solid $XX.X profit healthy Europe. a to Operating by profit timing first our product driven from profitability expenses the increase year line Similarly, of were margin. administrative increase on XX% of six a XXXX, of was $X.X affected The million of For for decline in European million up $X.X allowances to increased is sales was increases our increase pricing. increases to volume of year. slotting first and charges. million, and for in general in gross XX%

was negative basic $XXX,XXX $XXX,XXX six was of expenses compared for nonrecurring there break investments million a six The to $XX,XXX expense. adjusted of a Asia to a or and months compared EBITDA compared XXXX first year. Regarding stockholders for for even, in totaling million and the $X.X interest in XXXX or of million was EBITDA obtained comparable $XX,XXX once in other of a of reflecting other X.X% approximately in ago for months EBITDA the results months loss of charges months share adjusted adjusting of compensation charges of months positive Operating period. non-GAAP and $X.X good Adjusted period last million first depreciation, common expenses, EBITDA and diluted first compared six XXXX. By XXXX comparable a million of the $X.X XXXX to months first adjusted first period diluted we last the loss a share $X.XX first a to to in per of the $X.X per close amortization, positive stock-based net $X.X XXXX year very for for to year. result compared of six noncash to $XX,XXX loss again the company's of a as attributed the six included or $X.XX basic decline six to the lower net of for XXXX the

to turning Now, our companies.

lower is six our months. needs totaled anticipated mainly actually in the believe the of first operational operations As related XX, use assets XXXX concludes $X.X of Operator, company million than June XX XXXX sufficient cash of XXXX cash operations, compares $X.X $X.X net as months That in balance cash capital current six $XX.X of of for you approximately and has Thank in of with XX, million questions. cash to Cash use liabilities approximately of in This million next used you. $XX.X $XX.X XXXX, capital $X.X working in loss of for may the the XXXX. We in in meet was our open XXXX. months as and The million. XXXX. to working prepared related remarks. our from through call is and million to cash million December to the the cash million first increase the compared net of

Operator

[Operator Jeff FBR. Sinderen Van with from first comes B. Our question Instructions] Riley

Jeffrey Van Sinderen

can that I - you think, So in $X domestic, Was QX. sell-throughs also, In understanding. were tell Target filling maybe the you CVS? demand because had or was the seems us $X.X that a then think temporarily give for million that at you million and said us more you and can it better I I into that And much shifted supply guess channel about, outstripped how little you orders of CVS. about

is stand get I with you there in was you Are that behind more there those. outs and a sense you trying in where then you start So terms products stores? just terms inventory just in now of maybe We are had stock they a flavors? adding think stores. of think rolling the they production Do now? and said more to of where can capacity. the CVS to the Also, reset

John Fieldly

and of that those co-packers set of over in X.X million, Unfortunately, million, In of did the week last had the stocks certain about temporary shipped in work - product our in our now one throughout continued quarter. production over working did has shipments we've procurement production, weeks. that to our channels. third third delays the production. the and quarter, of $X.X of several stock which us SKUs shipment quarters years, our total to the the quarter from In regards delayed of have fully on some solidifying largest to accumulation weeks regards but really really on you of the we several to of we the with to out regards $X.X The to out of weren’t was timing of crossed first we the as last recall, have on all we the customers week about back the

now at feel co-packers. product stabilized. running inventory are We We our multiple that has

plans execute to have to online. We back We place online continue in actually added quarter. another co-packers the in we and our third have co-packer

We're -- growth. second point So in we you build we supply. for in in as went shipping time we of we amount XXX we are you have inventory first look we and CVS, have at move front checkout inventory open-air sufficient quarter, more the at When as to continue entered into question But to at orders coolers feel this continuing a your regards sufficient recall, early quarter, to forward. we CVS. time,

reorders, extremely received are CVS, optimistic partner to as with we continue we and strong from have We reorders them.

As somewhere we a the last September would there coming. place taking for mentioned around before that be call resets review

of locations, receiving on the the as reorders and we excited X,XXX we're stores. momentum with about were from In three SKUs, authorized I the based opportunity. So Target, very stated, in CVS volume we're

Targets, reorders. process we are product to quarter, The quarter, the with hit shelf, we as well that news very regards when that reorders going second were were through receiving. through the the the as the in excited, we great So

the product. to of we placement we're there gaining stated the additional and excited half this momentum initial of the we SKUs back on that are year success the the optimistic about earlier very So of due additional in in call very

a really prosperous we that to move future that. Target excited very we're at So look partnership and as we forward with about forward

Jeffrey Van Sinderen

was then in you Nordic flavor you a had can Okay, we with you understand said region. And in know well, the really new month. so you a can those May Nordic sounds like elements maybe better shift and if bit behind launches of I great that think decline I But to a help the strong the launches. mentioned what if us little region, couple forth. there also

give to region. it trying a like QX And orders have touch a received you’ve region just Maybe maybe was what from and sell-throughs and been So between those you're that then the us parse in sense out. in disconnect sounds the QX. in how on of that the expecting maybe sell-throughs sell-throughs, there's just

John Fieldly

Out Nordics, to and we in of of Nordics, our there talking about Sweden, quarter distribution Norway quarter, was with recycling the we're new Finland, the those. when partner. XXXX, variety opportunity place the as which we're in strategic When prior a that the at at look about you there XXXX look took launches, SKU talking

is addition, a more mentioned distribution our partner volume. more down we In bringing to investments manageable of

and of result a of they're refresh, new and look So going as through that, feel. a new this of packaging a transition

we We We third are have already the forward. we that very will more move as be orders are these speak as for quarter. confident that normalized production under in place orders

the So May regards sales customer really to it a stated timing orders great in was our with May, a I in regards to was In Nordics. month. replenishment

distribution they for a variety were the in there, strong. their drops month with co-op the pallet of the May very momentum. had Speaking partner of May they was variety and motivated location our over had where of in a very programs They sell-through

to get So we forward timing as we more normalized move a levels. to expect back this be and

in the The that positive We'll locations of the a into market. back XXXX. half coming XXXX, take to be key other and news opportunity the resets the to further gain getting There's Finland in is in those early other Norway co-op we're that's in expansion able the accounts distribution regards Nordics national outlets. additional information as place out with of great we're

Jeffrey Van Sinderen

just said great. And you which think about I China, you're one in I now doors, for XX,XXX me. more then is

term? of Can give you of your trending a count what in the sense door the business there? us there sell-throughs the Maybe there. increased how a you You’ve the in of trajectory near lot expect are terms

John Fieldly

quarter, of look In considerable to we shipped second March. Absolutely. a China, that had in the the product at amount you regard and quarter,

resets in retail post-Chinese than lot of And on A you stated several, taking team the the that, quarter, place the of of the of weeks further and the the we did earlier lost anticipated quarter. our as key at taking as in there. Year. XX,XXX addition in back place were back towards So second accounts they resets New to key quarter of end the a we key mentioned over several our sell-through accounts, XX,XXX result and on to opportunity. end that, call, is really But were which really success the locations

We been are been there The through when in in accounts. initial the these which some monumental rates, sell seeing several now. has we're about really accounts extremely in to positive take weeks we've four

So we are getting reorders.

master reorder day August a sold produced any have and up order to for distributor, in have now. and July our for we in another We to come gearing we're that

product distribution great the by seeing we and ground data So great some to we're placement more stores is and the feedback, we're how turning in execution Celsius is understand our are more partners. further gaining performing. But getting

Operator

comes next Our Thalmann. with question from Cohen Ladenburg Jeff

Unidentified Analyst

couple a had just I So questions.

to with drink coconut one any that trends similar like seeing coconut I'd flavors? popular. know you segment, I you water a become fitness introduced energy one? had think trends any had because that other I Are start to including so within the

John Fieldly

look we expect flavor, take that a which interests our It quarter and new by kiwi got we in to We now We cranberry guava an had the was flavor the July, just off a loves well channel fitness really It our next partners. great accounts coconut, great variety for channel. distribution to forward second one as embraced as kiwi authorizations reset. as and one in we our the that momentum and flavor. with is is the is mentioned, excellent regards of the of additional our big you product. just of in product, was When excellent it in a planogram which flavors, our in was rolling in you key flavors substantial our which it distribution well powder product the gain from move turning fitness really really to continue excellent got our that at, and Everyone lemon, as launched through as we feedback, our is guava.

Unidentified Analyst

XXX you think I Fitness you towards also, line about include the HEAT locations. then original are the into aiming line other? your more And expanded Planet you mentioned Did one and had that or that or

John Fieldly

at currently. look in you in channel HEAT and look line and authorized the fitness have where have distribution today. It launched X-XX the we of do line, distribution at our the nationally HEAT When we XX% is heat mainly fitness the our nation at initially ACV throughout the channel we line SKUs about

Our fitness authorization teams national specifically well combination SKUs. do well to those in line of have original the all Planet our with as see Celsius channels. on two a expanding we our focused because But that are Fitness, as those HEAT speaking to Fitness going Planet you're line locations, as as through

the and fitness channel. our performing Celsius both in are of combination a line core as lines well heat, extremely as see well that You'll

Unidentified Analyst

wondering initiative. color a a you on I talk that? little also tiny the could vending if more Could you micro-market was add about bit

John Fieldly

they for targeting at live, Absolutely. us. market, work, is play. how The this vending When micro-market opportunity is full encompassing. And exciting where consumers Celsius we're goes to and we extremely look

micro-markets. a to have channel addition that micro-markets, we roll focused the And we healthy micro-market, it's dedicated well at the work us. great these running is an really we're weekly is basis regards extremely which to opportunity for It and team So out to opportunity which sales of off-tick really, universities of the the in as a into a on quarter, started through locations, number vending on as colleges in second as seeing micro-markets, and the high well.

location. us you're at your So at-work to going see

health club. us at see your You'll

in us your specialty store. see vitamin You'll

You'll see us channel. in your drug

this also you'll your and channel online. us to mass in You'll see be able purchase

to to continue we're aligns our for expand and to a distribution. consumers major That that play. marketing as continue live, work, So strategies, available well nicely focus, We're target going they is with where consumers. which that

Unidentified Analyst

curious, XXX can volumes I wanted had your related the seeing you more to about you your you your online more started onboarding so, those and clicks Ambassador's one track to are by remember to had from if clicks? And guess website? program, posts Ambassador I I'm the with you you additional I said any ask minute. presence. last quarter, from

John Fieldly

passionate the very fans have brand. We of

speaking. We XXX and over more have on we're as boarded

We in but there, And engagement. that's as social be engagement We other to some to overall able software engagement. are seeing track our not more well. on we sites, we're increases do seeing third party additional have sites out the only the use

are So It's platform continue is to fan being great program very great for a for us experiential this brand. the of really our Celsius. additional opportunity product They're It and an product. benefits really to allows to to fans, a is spread this a attract People really core them get vocal. excited.

So we're incremental. that really it's and about excited all

Operator

next question with Vendetti from comes Anthony Our Group. Maxim

Anthony Vendetti

wondering, a I could partner. bit if go was John, more into just what Nordic the little distribution situation with just the you

understand Just partly seems one it's trying or more timing. other and like was the there if to That with factors timing it same China.

John Fieldly

The down you had Nordic cycle you levels. and the and QX of QX revenue you at flavors they when on partner, new with onboard get to time in overall those it's some and taking the get that a When through in large normalized inventories at brought quarterly flavors clear revenues, think some more rate to run they orders I for look revenues the picture. look XXXX,

our on, that's capital. focused thing working on improving So they are focused one are partners their

some working co-packers. time working bringing now, are bringing just-in-time and they we've really additional those them a two with that's which on we've really more something to manageable system, for on So investments down been been

working them working been on different we've able be manner that capital orders a improves synergies to in trying variety it on of timely so a more to provide needs. their So

orders third for received have the quarter. We

for We July. have produced orders

for an October We order as and have Actually, September. August have in-house well. orders we in

So like that refresh a our just are Plus, and down of some just it is timing towards full normalized inventory China, had to the distributor. we in to the a through inventory. they selling and correct, production their truly produce when there revenue they as they levels. it going at because in the runs like in master is recognition we're regards product, issue China, you Nordics repackaging more a work levels look moving through really that you were of When cycling

a have of place as quarter in reorders order took momentarily as of orders get taking a in should and those getting in-house affected August resets not lot the be those well. a And do late place orders and but in sell-through. China later that as quarter, result the result, for really quarter, the we So for we July production we another the did in

Anthony Vendetti

two correct? have inventory; are online, You co-packers just-in-time that which enable should better back

John Fieldly

the in that's Nordics. Well,

lot for in have And of Nordics, two Holland had, to brought inventory flow with we really as levels that We working working inventory in in co-packers their one streamline and Germany and we capital. time, that then and one inventory additional online the we're well. of a the bringing for our partner down some that they're

Anthony Vendetti

back the flipped I Nordic. meant. to I what That's

just that know then X-XX. I and don't provided could But rollout if Okay, if you going? you talk update on about an how is

John Fieldly

Absolutely. I us. X-XX is great mentioned the on for call, a opportunity

X-XX. We on are focused

are X-XX. We core really on ACV line, at a around we're around our right right XX%

to increases able per as we been McLane, each outlet. network every wholesaler at We we've and month through the increase are but seeing the ACV position. the well volume maintain We're in as forward, go our as really on coming national

we're really It optimistic So very and to that partnership. continues about relationship. excited this forget

We because the gain work distribution. is really a retailer. association attending FOA X-XX a additional process franchise It to franchise a lot in are is continual owned meetings of

door order we door to distribution. by sell So in have additional to go

tremendous core opportunity we a variety amount a it. our It's and about take of we're doing that's grow time. focused to different Celsius effort take to to ACV. continue just going tactics of our on with in going within as increase we're XX% and We're And grow continue line, to and HEAT XX% of to X-XX. So our line,

increasing great we quarterly online. the to build to monthly, other Very sales continue they are and these base, will for us. and as basis well these continuing stores - a With stores partner going that the brand about are come other optimistic perform retailers to a

Anthony Vendetti

relatively you I for talk machines; that's new Vending traction about know opportunity there? that a But you. the can

John Fieldly

have successful. on team are that very We members been currently traction has two initiative. truly this focused The there

about call. But feel quarter, the as micro-market further machines. numbers can vending our In as X,XXX confident and initially in of in, hypermarkets, excess additional quarter, gained I we we how updated vending are well are the on -- the provide throughout We I'll numbers many have next we micro-markets detailed in update, third on machines locations.

machines. at for exponential out turns these the There at locations opportunity those is work great healthy we're and is and there. is vending work opportunity And machines a us positive. the So at vending healthy and seeing in these extremely

Anthony Vendetti

is our There that about that on a million what $X distributor. completely resolved former just settlement now? memory was was with a like -- and Can looks it refresh legal you

John Fieldly

in settlement a did forward. with some had distributor we time, through Court It that territorial dispute was time. legal moved the it through was We've process. move System to We have a effort, the year gone LA ongoing for last filed. With we dispute,

grow business have to growing and We us behind on settlement to business. continue and are is focused that we our in great the opportunities

Operator

question private next Our with investor. question. comes Instructions] your Tilay [Operator from Please [ph], proceed a Richard

Unidentified Analyst

is first Tilay Richard in June gentlemen. XX stock afternoon, I'm Good Celsius name years, stockholder for my a [ph], having XXXX. My bought of

store the buy Carolina. product Pines, Now, Celsius Southern North I Teeter in at my Harris

only to my carry. So they products comments can be related what

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John Fieldly

at your the sparkling, diligently our Mango our question top off, employers products. non-carb, sparkling Raspberry day. all line team Tea. hard as and It's our truly a of and is flavors. core a I Green you our cans to appreciate and Harris is on our which I differentiation a Acai tops this in are long-term working line Peach core assure cans [ph], are To management a each to First very Teeter, company commitment the black answer and and every your can shareholder are aluminum The

are those So our two tea line. flavors core in the

which have, and also lime, naturally caffeinated Harris lime, sweetened our with naturally is in erythritol. We stevia sweetened the Teeter,

will natural But I -- line there assure has natural is that And of our sweetened will we Teeter, Fresh entered and extremely in differences lot are be a the contains contain channel just our our from core and demand that to Harris seeing line, which stevia some Market. line well. Sprouts for erythritol. as doing you, So profile that and naturally flavor well that natural the line product

Operator

comes Negi a investor. next Our [ph], from Diane private question

Unidentified Analyst

see my do is the the for affecting coming question the a and line long-term Yes, investor tariffs bottom first how as I'm you well quarters?

John Fieldly

call. briefly lot I which call joining are appreciate In touched a regards that importing the thank apart, us for the in that companies to your different tariffs you you other I that And and is on the into one thing very sets on than long-term support. of China. China,

We are not importing into China.

locally. producing actually are We

So materials. raw it's locally production, sourced local

local a and entity registered have structure we where in Beijing. have We team that's we a local have company an

products not are are by because affected we tariffs today we So into the not importing China.

Unidentified Analyst

and are are I The I seek the right rent. bottom now you practical in seek were I'm other if think reasonable quarters. help have to expensive more question cheaper one. you line pretty you would don't wondering that is quarters The a

John Fieldly

you, to topline as management effectively the dedicated as continue to driving this line. employees growth, as team, can grow revenue I ultimately each efficiently every been to business improving of bottom gross are we and our assure and and has improving goal and that, a can Our one profit,

our Celsius. best quotes of we suppliers and where pushed to very price are gained for all We the expenditures vendors and diligent additional on gain we

a investments As and date charges those one-time America, to where investments we additional topline we throughout that our your considerable out answers and taking focus on growth. into on with we marketing in that. that. to controlling will our in strong grow marketing dollars to able we monitoring to breakeven at Asia, and that I be continue ON throughout year hope close efficiencies North seeing a supply continue are gain We're in diligent And made chain expenses. scale, on SG&A expenses. question and were we're basis, to reinvesting revenue and very the

Operator

we this for session. closing comments. gentlemen, and like end to the I the call time, and of answer management At have back to question reached Ladies the turn would

John Fieldly

you. Thank

momentum, products our demonstrates health results trends. are quarter second and are wellness gaining s considerable on underlying capitalizing Our we today's

Our active is lifestyle mass position position global healthy with a appeal.

are day. and you, of Celsius core investors practices. for We I'm on our thank their best and continued deploying everyone, have very Thank up team I your interest business leveraging for opportunities our great building and proud and dedicated in a our support.

Operator

today's conference. This concludes

lines we participation. for time disconnect may your your this You you at and thank

Celsius (CELH) 12 Aug 182018 Q2 Earnings call transcript